AI and Automation in Management Reporting: A Finance Leader’s Guide

Over the last year, all we heard about was AI and automation as the rising stars of the techno world. It has dominated the business landscape for quite some time and continues to do so with every passing day.

For instance, ranging from identifying consumer behaviour to applications in banking to identify real-time identification, it is prevalent at almost all the touchpoints you can imagine. Technology-driven companies are aggressively exploring the AI and automation landscape, with other sectors following the trend. Healthcare companies are incorporating AI to drive the research in a fast and efficient manner, with a focus on easing the work of researchers, freeing them from redundant data entry tasks.

The finance sector is witnessing the adoption of AI reporting tools in financial reporting automation that will free up the valuable time of the finance leaders to make faster and better strategic decisions.

Let’s look at how AI is transforming management reporting and can help you stay on the competitive edge.

Understanding the role of AI and financial reporting automation

AI reporting involves integrating advanced technologies to enhance the existing processes and streamline your workflow. It automates the extraction, interpretation, and presentation of complex data, significantly cutting down the time and effort. AI reporting tools like ResultLane offer faster delivery of valuable insights, acting like a smart assistant for your marketing data.

Some companies may use smart tools to automate parts of their processes, including steps to manage risks. Others may fully automate their processes, where the technology handles problems on its own.

If you are planning to adopt financial automation tools, you might want to identify the problems in the updated processes after implementation. Some of these problems may be solved by the automated system, while others may still need people to handle.

Before the implementation of AI reporting and automation, the management must ask these questions and assess the impact promised to be delivered by the AI reporting tool:

• What are the AI system’s capabilities and security compliance controls?
• How can one be sure that the AI system is performing as intended and does no harm?
• Does our AI system comply with regulatory, governance, and control requirements?
• What governance or control frameworks are available to assess the sufficiency and effectiveness of our AI system?
• Do we have stakeholder engagement across IT, risk and business teams?

Key challenges addressed by the adoption of AI reporting tool for management reporting

– Cost and time resources are wasted due to lack of common industry interpretations of reporting requirements

– The lack of standardized interpretations complicates the consolidation and comparison of data, particularly for regulatory reporting.

– During month-end close, all these delay the insights from reaching the decision makers, leading to lost opportunities.

– Lack of consistency across borders and disparities to top up the chaos.

What risk assessment considerations are important with respect to the use of AI in management reporting?

AI can introduce risks that directly or indirectly impact financial reporting. When performing risk assessment, consider how the responsible and ethical use of AI is managed. The following questions may assist in assessing the impact of risks.

– Are there established policies and procedures covering responsible and ethical use, including explainability, accountability, fairness in data and outcomes, security, privacy, safety and data integrity?

– How does the deployment of Intelligent Tools affect statutory, regulatory or contractual compliance?

– Has the entity identified a framework to follow for compliance that is consistent with respective applicable regulations?

How ResultLane’s smart finance platform eases management financial reporting with its AI embedded features?

1. Financial Performance Tracking

• Profit Center Reporting : You can gain clear visibility into costs associated with specific departments or functions. This feature helps you identify areas for optimization and improve your overall financial health.
• Budget vs. Actual Variance Analysis : You can track your actual performance as compared to the budgeted one. Investigate discrepancies, collaborate with finance and business teams, and take corrective actions to stay on track.
• Generate Financial Statements by Dimensions or Profit Center : Analyze financial performance from various perspectives (e.g., department, product line, or location) to obtain a comprehensive view of the business and make informed decisions.

2. Data Analysis and Insights

• Smart Summaries : Automatically generate summaries by reading comments, narratives, general ledger (GL), and transactions. Our AI-assisted platform identifies the top 5 variances, providing you with actionable insights quickly.
• Advanced Analytics : You can uncover financial trends and patterns to get a deeper understanding of your business’s performance. Move beyond basic reporting with AI-powered analysis.
• KPI and Metric Monitoring : Track essential KPIs and metrics to assess the health of your business, ensuring you’re always in control of your financial trajectory.

3. Smart Inference and Automated Insights

• AI-Powered Inference : Ask the system detailed questions, such as, “What is the reason for the change in Month-over-Month (MoM) cost of sales?” Our platform uses advanced AI to provide insights into the contributing factors behind changes, helping you understand the root causes behind fluctuations.
• Automated Intercompany Transactions : With AI and anomaly detection, automatically manage intercompany transactions, ensuring compliance, reducing manual effort, and identifying potential discrepancies before they become issues.

4. Customization and Flexibility

• Customizable Models : You can choose to clone and modify pre-built models or create new ones from scratch to have full control over your financial reporting processes.
• Executive Summaries : We offer smart summaries that can infer data from comments and narration and simplify the communication of key financial insights to stakeholders.
• Transparent Workings with Built-in Sheets : You can complete traceability and transparency in your reports with built-in sheets that ensure clarity and ease of understanding.
• Automated Scheduling : Easily automate your management reporting processes to save time and reduce manual workloads. Schedule reports and insights delivery to streamline decision-making.

Schedule a demo to see how easy it is to automate your management reporting with ResultLane!