When businesspeople think of important corporate assets, they often start by picturing physical things such as office buildings, computers and printers.
But there’s another different type of corporate asset that’s becoming increasingly valuable. In fact, it’s becoming — more than ever — a strategically crucial differentiator.
It’s called data.
This is great news for you in your role as a chief financial officer (CFO). You have a creative opportunity to use all the income, expense, payment, invoice, cash flow, customer and other types of data to generate more valuable insights.
But here’s the best part. These insights lead to more intelligent business decisions. Those include deeper understandings of your cash flows so you can plan where to make investments in the future.
How big a deal is data in accounts payable processes?
Use of data in new and smart ways is becoming a crucial trend in areas CFOs are responsible for ranging from figuring out patterns in cash flow over the past several months to choosing accounts payable (AP) automation payment systems and associated software.
Consider this stat: 88 percent of finance pros said data and intelligence are important or critical pieces of the AP process, according to results of an Ardent Partners survey summarized in the research company’s report titled Accounts Payable Metrics That Matter in 2020.
The survey also finds that best-in-class companies are “twice as likely to leverage data and intelligence as a means to improve stakeholder collaboration and 1.6 times more likely to use AP-related data and intelligence for enterprise cash flow analysis.”
Over the next few years, Ardent Partners predicts “a new type of intelligence” will empower finance pros, including CFOs, to see their operations differently and therefore compel leaders to change the way they’re managed.
“Accounts Payable intelligence demands powerful analytics and deep insights,” according to the report. “It demands agility. The ability to make better informed decisions across an organization can and will be game changing. AP leaders must start now to ready their teams.”
The growing importance of machine learning for CFOs
With all this attention being paid to the value of data, CFOs will benefit from learning more about an increasingly popular type of data-centric artificial intelligence (AI) technology called machine learning.
In the world of AP automation, the technology processes and analyzes data to detect behavioral patterns of supplier payments and invoices and predicts the likelihood of those behaviors continuing.
For example, the machine learning technology might show that a particular payment method, such as sending checks to the supplier, hasn’t been working over the past six months, and there’s a strong probability this will continue if nothing changes.
The checks either don’t arrive on time or not at all. Based on behavioral data, machine learning alerts the business that something needs to be fixed.
In response, the business making the payments could, for instance, offer the supplier a different payment option that could be faster and more reliable. Or the supplier could tell the payer what method they would like to use to remedy the situation.
Machine learning in AP automation can also help CFOs better understand vendor payment risks, forecast future spending increases or decreases and detect the statistical probability of invoice anomalies and fraudulent checks based on historical data.
One-third of financial pros are familiar with machine learning
There’s considerable awareness among finance pros about the benefits of machine learning. An AvidXchange survey reveals that 43 percent are familiar with artificial intelligence and more than one-third (34 percent) know about machine learning.
Consistent with this, familiarity with the importance of data is also becoming much more widespread in the business community. In fact, it’s inevitable that businesspeople including CFOs will be using a lot more data in the future to make smarter business decisions.
Lots more data is going to be created, and people will want to capture and save that data. Even if you’re not working with data now, you will be soon. CFOs who sharpen their skills of using data to generate insights to respond more intelligently to markets will excel in the coming months and years.
Businesspeople are hungering for more data and information. Any kind of hard and fast data analytics capability is becoming extremely important to business success.
From an AP automation standpoint, companies will use data analytics and intelligence to send out invoices and gain insights into how customers, vendors and suppliers interact with that invoice so they can deliver them more personalized services.
Final thoughts
Now is a great time for CFOs to figure out new ways to use your cash flow, payment, invoice and accounting data to generate more value for your customers.
The good news is you already have the data and can use machine learning to glean more value from it.
You might ask yourself these kinds of questions: How can you look at the cash flow data over the past six months and figure out why one month was higher than the other? Or you may want to identify which customers and suppliers are most loyal and which ones put your company at the most risk? Which way of paying people is most likely to make them more loyal customers?
Imagine all the other ways you can harness the power of your data – a key strategic asset – and you’re bound to make exciting discoveries.
Get creative with your data. Consider using machine learning to help you make better decisions. This is a slick strategy growth strategy you can put to use in original and cool ways.
And it will boost your business — big-time.
