Behind the scenes, the finance function – and all its spreadsheets, manual processes, and legacy systems – is undergoing a seismic shift.
Artificial intelligence (AI) is emerged as a force within business process development. Businesses are turning to AI to automate not only repetitive tasks but also more complex processes such as compliance tracking, fraud detection and supply chain optimization, using tactics such as integration . robotic process automation (RPA) with AI to streamline workflows.
The timing couldn’t be better. The back office has long been overlooked in conversations about innovation, but it Renewal is no longer optional. With increasing uncertaintyregulatory complexities and competitive pressures, companies are looking for ways to streamline operations, improve decision-making and unlock efficiencies.
The back office is ready for its glow-up — and the appropriate, effective and responsible use of AI will be key.
See also: Into the Nitty-Gritty: How, Why and Where Automation Optimizes B2B Payments
Why the Back Office is Ripe for Digital Transformation
For decades, the finance function has acted as the backbone of the company’s operations, but not without many challenges. Manual data entry, reconciliation and reporting dominate workloads, with employees often spending hours navigating disparate systems.
“Any time, if you have a role, you introduce manual processes,” Duncan Lodgeglobal head of supply chain finance and EMEA head of trading at Bank of Americatold PYMNTS. “That means someone has to take the information, process it and ensure its accuracy – introducing delays, inefficiencies and the potential for error.”
These inefficiencies are amplified by small and medium-sized businesses (SMBs), which often lack the resources for large financial groups or advanced tools. For these companies, the pressure to “do more with less” has reached critical levels.
AI offers a compelling solution by automating repetitive tasks, improving accuracy, and delivering real-time insights. While automation tools have been around for years, the addition of AI has transformed them into dynamic systems capable of learning, adapting and revealing patterns that humans might otherwise overlook.
The PYMNTS Intelligence report “CFO’s Eye Accounts Acceptable as New Direction for AI Investments” found that 55% of chief financial officers (CFOs) representing mid-market businesses are willing to pay 3% of the invoice amount to receive payments using a solution that automates invoice approval and payment.
Compared to the risks of paper checks, adding AI to payment systems can result in a fraud defense that is better at anomaly detection, identifying potential fraud in real time through identify unusual patterns in transaction data. Additionally, these systems simplify compliance by continuously monitoring regulatory changes and updating processes to reflect new requirements.
See also: The Evolving Role of AI in B2B Payments Will Be Impossible to Ignore by 2025
Streamlining AP and AR
Traditional accounts payable (AP) and accounts receivable (AR) processes are full of inefficiencies, from invoice approval to payment collections. AI-powered solutions can automate invoice processing, flag discrepancies, and predict payment behaviors. Tools like machine learning algorithms also help analyze payment patterns to improve cash flow forecasting, giving CFOs and treasurers a clear view of working capital. .
With AI, financial reporting is no longer a static, backward-looking process. Machine learning algorithms can synthesize data from multiple sources — ERP systems, bank feeds, and even external economic indicators — to provide predictive predictions. well It empowers finance teams to move from reactive reporting to proactive strategy.
According to a report by PYMNTS Intelligence, “Outlook 2025: CFOs See Evolving Role for Generative AI in Finance“CFOs are also adopting generative AI in finance for strategic and financial tasks. More than 60% of CFOs reported using GenAI for creating data visualizations and reports to help improve clarity View and access complex financial data.
“Inclusion of data in money flow will provide significant improvements for businesses,” Seamus Smithexecutive vice president and group president of FIStold PYMNTS. “Early adopter organizations and larger consumers of new technology will accelerate ahead.”
Despite its promise, adopting AI in the back office is not without its challenges. Resistance often comes from two main sources: cultural inertia and perceived complexity.
Finance teams have traditionally been cautious about adopting new technologies, often prioritizing reliability over innovation. Convincing stakeholders to invest in AI requires a clear return on investment. However, according to the data of PYMNTS Intelligence report,”Most CFOs See Limited ROI From GenAI, but Maximize Its Investment,” 75% of CFOs plan to increase their AI investment.
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The post Is Enterprise AI the Prescription for Back-Office Bottlenecks? first appeared in PYMNTS.com.
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