Finance heads and managers in small and medium enterprises (SMEs) often find themselves overwhelmed by manual, routine tasks such as data entry, invoice management, and report creation.
These menial tasks can eclipse their more strategic responsibilities like process improvement, strategic planning, and cost reduction.
The solution to this problem lies in freeing finance managers from these routine tasks.
While some technological solutions are available, none have fully reduced the burden on finance managers.
AI-Powered Automation: Streamlining Spend Management
SMEs handle hundreds of invoices monthly. According to a study by Levvel Research, a staggering 86% of SMEs still rely on manual processing invoices globally.
In Singapore, some businesses manage 200-500 invoices a month.
A Stripe-Milltown Partners survey of 2023 revealed that 89% of top finance execs in Singapore spent over half of their time on manual back-office tasks, significantly higher than their peers in Japan (75%) and Australia (75%).
Recognising the need to address inefficient practices like manual processing, the Infocomm Media Development Authority implemented InvoiceNow, a nationwide E-invoicing network, in 2019 to help businesses improve efficiency and reduce cost.
InvoiceNow can be used for both accounts receivable and accounts payable.
Automating these processes can benefit SMEs.
This is where Artificial intelligence (AI) becomes important. Many organisations that have embraced AI have seen tangible results, including maximised revenue.
However, Singapore’s SMEs have yet to wake up to the AI reality.
Though 42% of Singaporean employees acknowledge that AI has saved at least 10 hours on tasks, many SMEs have yet to embrace AI.
Undoubtedly, AI can provide succour to finance managers. Singapore-based businesses already acknowledge that AI could enhance audit capabilities and task automation.
Effective expense management, however, depends on how well a company captures and processes information, approves transactions, ensures accurate financial accounting, and uploads correct payment data.
AI-powered spend management tools, like Summit, excel here.
These tools can scan, read, and interpret invoices and receipts, automatically populating accounting platforms with precise information.
This empowers finance teams with intelligent automation, boosting visibility, control, and streamlining workflows.
Key Benefits of AI-Driven Spend Management Tools
AI-driven spend management tools offer three primary benefits:
1. Time Savings: Eliminates the need for manual data entry.
2. Instant Access: Provides quick and easy access to vast amounts of data.
3. Error Detection: Identifies anomalies in the data, helping prevent errors.
Let’s consider the employee expense management process in a business for example.
Traditionally, it’s time-consuming for employees to submit claims and for the finance team to process and approve them.
However, modern spend management tools can swiftly sift through vast amounts of data, check for duplicity, matches the claims with company policies, and process them in real time.
Predictive Analysis: Beyond Routine Tasks
The potential of AI doesn’t stop at employee expense management. It can also perform predictive analysis.
Most companies lack the time and bandwidth to analyse their data thoroughly when generating budgets and forecasts for the upcoming year.
They often rely on standard data, overlooking crucial details like seasonal trends and shifts.
For example, some SMEs in Singapore might want to understand the impact of the Chinese New Year on the Southeast Asian market, particularly in terms of expenses and revenue.
Unfortunately, their finance teams may lack the bandwidth for this analysis.
AI can be a game-changer here. For example, Summit can swiftly analyse data, incorporating factors like public holiday effects on spending and predicting the impact of upcoming events.
With these insights, businesses can enhance the accuracy of their future budget forecasts.
Smarter Investment Decisions Through AI
Furthermore, AI can also enhance investment decisions. Understanding the data is crucial for managing expenses effectively, though.
For instance, you might start with a software subscription for your business costing S$100 per month.
Over time, the costs go up to S$300 a month. Often, these increases go unnoticed because they happen gradually.
These changes can slip through the cracks unless you consistently pull and analyse the data.
AI can help here. AI constantly analyses your data, identifies anomalies, and highlights trends.
It can alert you to your fastest-growing expenses and suggest renegotiation with suppliers.
While AI’s potential to disrupt traditional workflows is proven, many still view it as a treat and make their jobs redundant.
Finance professionals don’t need to worry about AI replacing them. Instead of viewing AI as a threat, they should look to upskill themselves with modern AI skills.
This will enable them to work on more meaningful tasks.
Fraud detection is yet another area where AI can be a true ally. AI-powered algorithms can detect patterns in financial transactions that may indicate fraudulent activity.
Wells Fargo uses it to analyse millions of transactions daily to detect potentially fraudulent activities in real time.
AI is an Enabler, Not a Threat
In essence, AI continues to evolve, offering finance managers in SMEs the opportunity to transition 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 finance managers redundant, AI enhances their roles, allowing them to focus on what truly matters: driving growth, improving efficiency, and contributing to the long-term success of their businesses.
The future of finance management is not about replacing human expertise but amplifying it with the power of AI.
Featured image credit: Edited from Shutterstock
