Finance executives and managers in small and medium-sized enterprises (SMEs) are often overwhelmed with manual, day-to-day tasks such as data entry, invoice management, and reporting.
These simple tasks can overshadow more strategic responsibilities such as process improvement, strategic planning, and cost reduction.
The solution to this problem lies in freeing financial managers from these daily tasks.
Although several technological solutions are available, none can completely alleviate the burden on financial managers.
AI-powered automation: Streamline spend management
Small businesses process hundreds of invoices each month. A study by Levvel Research found surprising results. 86% of small businesses still rely on manual invoice processing worldwide.
In Singapore, some companies manage between 200 and 500 invoices a month.
Stripe-Milltown Partners 2023 Survey revealed 89% of top financial executives in Singapore spend more than half of their time on manual back-office tasks, significantly higher than their peers in Japan (75%) and Australia (75%) .
Recognizing the need to address inefficient practices such as manual processing, the Infocomm Media Development Authority implemented InvoiceNow. Nationwide e-invoice network2019, to help businesses improve efficiency and reduce costs.
However, since this system is primarily used for accounts receivable, there is room for automation for accounts payable as well.
Automating these processes can benefit small businesses.
This is where artificial intelligence (AI) becomes important. Many organizations that have adopted AI have achieved tangible results, including: Maximize profits.
However, Singapore’s SMEs are yet to wake up to the reality of AI.
However 42% of Singapore employees admit that AI has saved them at least 10 hours of work timeMany small and medium-sized enterprises have not yet adopted AI.
There is no doubt that AI can provide assistance to financial managers. Singapore-based companies already know that AI could enhance audit capabilities and task automation.
However, effective expense management depends on how your business captures and processes information, approves transactions, ensures accurate financial accounting, and uploads correct payment data.
AI-powered spend management tools summitClick here for Excel.
These tools can scan, read, and interpret invoices and receipts and automatically enter accurate information into your accounting platform.
This gives finance teams intelligent automation, greater visibility, control, and streamlined workflows.
Key benefits of AI-powered spend management tools
AI-powered spend management tools have three main benefits:
1. Save time: Eliminate the need to manually enter data.
2. Instant access: Access vast amounts of data quickly and easily.
3. Error detection: Identify anomalies in your data and help prevent errors.
For example, consider the employee expense management process in a company.
Traditionally, it takes time for employees to submit claims and for finance teams to process and approve them.
But modern spend management tools can quickly sift through vast amounts of data, check for duplicates, match claims against company policies, and process them in real time.
Predictive analytics: Beyond everyday tasks
The potential of AI extends beyond employee expense management. You can also perform predictive analysis.
Most businesses lack the time and bandwidth to thoroughly analyze data when creating budgets and forecasts for next year.
They rely on standard data and often overlook important details such as seasonal trends and changes.
For example, some SMEs in Singapore may want to understand the impact of Chinese New Year on the Southeast Asian market, especially from an expense and revenue perspective.
Unfortunately, finance teams may lack the bandwidth to perform this analysis.
AI could be a game changer here. For example, Summit can quickly analyze data and make predictions, incorporating factors such as the impact of holidays on spending or the impact of upcoming events.
Using these insights, companies can improve the accuracy of their future budget forecasts.
Smarter investment decisions with AI
Additionally, AI can also enhance investment decisions. However, understanding your data is key to effectively managing your expenses.
For example, let’s say you start with a business software subscription of S$100 per month.
Over time, the cost increases to S$300 per month. Often these increases occur gradually and go unnoticed.
Unless you consistently capture and analyze data, these changes can slip through the cracks.
This is where AI can help. AI constantly analyzes data, identifies anomalies, and highlights trends.
Alerts you to rapidly increasing expenses and suggests renegotiations with suppliers.
Although it has been proven that AI can disrupt traditional workflows, many people still view it as a treat, making their jobs redundant.
Financial professionals don’t have to worry about AI replacing them. Instead of viewing AI as a threat, you should look to upskill yourself with the latest AI skills.
This frees you up to work on more meaningful tasks.
Fraud detection is another area where AI can be a real ally. AI-powered algorithms can detect patterns in financial transactions that may indicate fraudulent activity.
Wells Fargo uses it to analyze millions of transactions every day and detect potential fraud in real time.
AI is an enabler, not a threat
Fundamentally, AI continues to evolve, offering financial managers in small and medium-sized businesses the opportunity to move from mundane manual work 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 eliminating the need for finance managers, AI will enhance their role, 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 replacing human expertise, but augmenting it with the power of AI.
Featured image credit: Edited from Shutterstock
