Some firms are already beta-testing the predictive AI transaction analysis tool, slated for release in 2024
Accounting leaders are all too familiar with the costly challenges associated with processing intercompany transactions: these often represent tens of millions of transactions each month and can have a value up to 10 times a firm’s reported revenue.
These transactions frequently span geographical borders, currencies, and enterprise resource planning platforms. Given their inherent complexity, compounded by data quality issues and omissions, intercompany transaction failures are an issue organizations simply cannot ignore. Failures can result in delays in billing, invoicing, reconciliation, and settlements, among a myriad operational challenges.
How can technology be used innovatively to prevent problems with intercompany transactions? If you guessed AI and ML, you are right.
An appropriate use of these technologies can analyze an organization’s transactional data, predict where issues are likely to arise to pose a risk to financial close processes and data accuracy — before the transactions are booked. The AI can highlight high-risk transactions, explains risk factors, show accounting teams where immediate corrections are possible, and provide guidance for future transactions.
With this kind of predictive guidance, accounting teams can reduce, or in some cases eliminate, intercompany transaction failures, and achieve significant time and cost savings.
According to Don Ryan, Chief Strategy Officer, HFS Research: “Intercompany reconciliations overwhelm most accounting teams with their high volume, frequent data inconsistencies, significant administrative and manual work, long lead times, and stringent compliance and regulatory risks,” and AI-powered predictive guidance would help CFOs to “reduce error rates, save significant costs and enhance the reputation of companies of all sizes.”
Ryan was actually referring to an innovative product slated for release in 2024 that could be integrated into an existing line of intercompany non-trade solutions. Said Therese Tucker, Founder and Co-CEO, BlackLine, Inc., the firm behind this much-needed AI automation: “Intercompany predictive guidance leverages the power of AI to help solve the real-life challenges these teams face daily, making them less reactive and freeing them up to focus on strategic work.”