Finance managers and managers of small and medium-sized businesses (SMBs) often find themselves overwhelmed with manual, routine tasks such as data entry, invoice management and reporting.
These menial tasks can overshadow their more strategic responsibilities such as process improvement, strategic planning and cost reduction.
The solution to this problem lies in freeing financial managers from these routine tasks.
Although some technological solutions are available, none have completely eased the burden on financial managers.
AI-Driven Automation: Streamlining Spend Management
SMEs process hundreds of invoices each month. According to a study by Levvel Research, a staggering figure 86% of SMEs still rely on manual invoice processing on a global scale.
In Singapore, some companies manage between 200 and 500 invoices per month.
A 2023 Stripe-Milltown Partners survey revealed that 89% of senior finance executives in Singapore spent more than half their time on manual back-office tasks, significantly higher than their peers in Japan (75%) and Australia (75%).
Recognizing the need to combat inefficient practices such as manual processing, the Infocomm Media Development Authority implemented InvoiceNow, a national electronic invoicing networkin 2019 to help businesses improve efficiency and reduce costs.
However, this system is primarily used for accounts receivable, leaving room for accounts payable automation as well.
Automating these processes can benefit SMEs.
This is where artificial intelligence (AI) comes into its own. Many organizations that have adopted AI have seen tangible results, including maximized revenue.
However, SMEs in Singapore are yet to wake up to the reality of AI.
However 42% of Singaporean employees agree that AI has saved at least 10 hours on tasksmany SMEs have not yet adopted AI.
There is no doubt that AI can help financial managers. Singapore-based businesses already recognize that AI could improve audit capabilities and task automation.
However, effective expense management depends on how a business captures and processes information, approves transactions, ensures accurate financial accounting, and uploads correct payment data.
AI-powered expense management tools, like Summitexcel here.
These tools can scan, read and interpret invoices and receipts, automatically populating accounting platforms with accurate information.
This enables finance teams to benefit from intelligent automation, improving visibility, control and streamlining workflows.
Key Benefits of AI-Driven Spend Management Tools
AI-powered expense management tools offer three main benefits:
1. Time saving: Eliminates the need for manual data entry.
2. Instant access: Provides quick and easy access to large amounts of data.
3. Error detection: Identifies anomalies in data, helping to prevent errors.
Take for example the process of managing employee expenses in a company.
Traditionally, it takes a long time for employees to submit claims and for the finance team to process and approve them.
However, modern expense management tools can quickly sift through large amounts of data, check for duplicity, match claims with company policies, and process them in real time.
Predictive analytics: beyond routine tasks
AI’s potential doesn’t stop at managing employee expenses. It can also perform predictive analysis.
Most businesses lack the time and bandwidth to thoroughly analyze their data when generating budgets and forecasts for the coming year.
They often rely on standard data, overlooking crucial details such as trends and seasonal changes.
For example, some SMEs in Singapore may want to understand the impact of Chinese New Year on the Southeast Asian market, particularly in terms of spending and revenue.
Unfortunately, their finance teams may lack the bandwidth for this analysis.
AI can be a game changer here. For example, Summit can quickly analyze data, incorporating factors such as the effects of holidays on spending and predicting the impact of upcoming events.
With this information, businesses can improve the accuracy of their future budget forecasts.
Smarter investment decisions thanks to AI
Additionally, AI can also improve investment decisions. Understanding data, however, is crucial to effectively managing expenses.
For example, you can start with a software subscription for your business costing S$100 per month.
Over time, costs rise to S$300 per month. Often these increases go unnoticed because they occur gradually.
These changes can slip through the cracks unless you systematically extract and analyze the data.
AI can help here. AI continuously analyzes your data, identifies anomalies and highlights trends.
It can alert you to your fastest growing expenses and suggest renegotiation with suppliers.
Although AI’s potential to disrupt traditional workflows is proven, many still view it as a treat and make their jobs redundant.
Finance professionals need not fear that AI will replace them. Instead of viewing AI as a threat, they should seek to upskill themselves with modern AI skills.
This will allow them to work on more meaningful tasks.
Fraud detection is another area where AI can be a real ally. AI-based algorithms can detect patterns in financial transactions that may indicate fraudulent activity.
Wells Fargo uses it to analyze millions of transactions daily to detect potentially fraudulent activity in real time.
AI is an enabler, not a threat
Essentially, AI continues to evolve, providing SME finance managers with the opportunity to move from routine manual tasks to more strategic roles.
By automating processes such as expense management, data analysis, and investment tracking, AI tools not only save time and reduce errors, but also provide deeper insights for better decision making.
Far from making CFOs redundant, AI enhances their roles, allowing them to focus on what really matters: driving growth, improving efficiency, and contributing to the long-term success of their business.
The future of financial management is not about replacing human expertise but amplifying it with the power of AI.
Featured image credit: edited from Shutterstock