Gartner Identifies Top 5 Use Cases for AI in Corporate Finance
“FP&A leaders should consider the maturity and needs of their own finance organization, as applicability may vary by organization and industry,” McDonald said. “These use cases are commonly implemented and effective, but the most valuable use cases leverage a company’s unique strengths and further differentiate it.”
To clarify use cases, Gartner experts have provided more detailed definitions.
- Demand/Revenue Forecast: Using internal and external data sources, the models predict demand and associated revenue across a variety of dimensions, including business unit, product line, SKU, customer type, and region.
- Detection of anomalies and errors: Anomaly detection uses a series of machine learning (ML) models to highlight transactions or balances that are erroneous or may violate accounting principles or policies. A complete solution will also include real-time analysis during data entry, preventing errors from entering the workflow and avoiding costly corrections downstream.
- Help with the decision: ML prediction algorithms designed to predict outcomes based on current data are used to predict outcomes when alternative data values are used. Using models with hypothetical data predicts the outcome of alternative decisions.
- POC revenue forecast: Or POC accounting, ML models forecast percent complete metrics (e.g. hours, cost, units, weight, etc.) to predict POC revenue and total remaining completion effort.
- Cash receipts: ML models are used to predict when customers will pay bills, triggering proactive collection efforts before payments are overdue. Using predictions from these models, collections staff focus their efforts on at-risk accounts. Expected receipts also contribute to the overall ML-based cash flow forecast.
“Forecasting is a popular use case in financial services because legacy processes are manual and notoriously unreliable. AI excels at automating and improving accuracy.” “Many preconfigured software packages address common financial processes such as accounts receivable and accounts payable, but be aware that use cases that address unique business needs, such as forecasting, will require some in-house skills to develop.”