Generative AI technologies like ChatGPT and Bard aren’t the end of the world, as sci-fi antagonists may make them out to be. But they’re not demure wallflowers, either. The truth exists somewhere in between, leaving CFOs with many questions but few answers on how to integrate these game-changing tools to maximize efficiency, accuracy and insight into everyday finance and accounting.

First and foremost, it’s important to understand what generative AI is and isn’t. No AI can think or emote like human beings, at least not yet. Instead, when you type a question into ChatGPT’s prompt, it strictly uses mathematics and probability to respond, tapping into a massive reservoir of data to arrive at the answer that’s most likely correct.

Therefore, generative AI is simply an artificial intelligence trained to generate new data based on existing data. It’s a useful assistant, not a sentient being, and most beneficial when it’s helping a finance organization streamline workflows, optimize processes, and improve business insights. Ultimately, ChatGPT can help teams improve, not replace them, and that’s a critical distinction that too often gets buried in the hype.

Empowering accounting and finance with generative AI

The real question CFOs should be asking is how they can use generative AI tools to create new value, either by freeing up time for team members, generating deeper insights, or both. At the individual level, AI excels in quickly handling tedious yet important daily tasks.

Financial report creation: Accounting professionals no longer have to wade through endless stacks of spreadsheets for data. Generative AI can speed up the preparation of financial reports by swiftly analyzing data sets, freeing your team to deliver more value-added tasks.

Data analysis: Generative AI can then dive deeper into these datasets, pulling out valuable patterns and anomalies that would otherwise go unnoticed. Further, it can significantly enhance decision-making efficiency and impact by eliminating common bottlenecks like manual analysis and human error.

Writing and communication assistance: Many accountants look at composing emails and other important documents as a necessary evil that costs precious time they could better use elsewhere. ChatGPT, Bard and similar tools can simplify copywriting and editing tasks, increasing productivity while still ensuring clear communication.

Improving business functions with generative AI

While individual productivity benefits are a good start, bigger gains lie in generative AI-enhanced business processes:

Financial modeling and analysis: In just a few seconds, generative AI can handle complex financial calculations, offering new levels of efficiency and accuracy for FP&A teams.

Predictive analytics and process optimization: Generative AI can dive into historical data, tease out trends, and guide laser-focused forecasting and planning. It can also refine and develop new ways to streamline operations, improving process automation and decision-making capabilities.

Anomaly and error detection: AI can spot and rectify hidden issues quickly, improving financial reporting and compliance, reducing the risks of human error, and helping to optimize cash flow and revenue management.

Vendor evaluation: A tool like ChatGPT can simplify and streamline the vendor selection process, comparing strengths and weaknesses of different software solutions. The result is a far less daunting, more efficient and comprehensive due diligence process.

Steps for implementing generative AI

Of course, new technologies always look great on paper. The rub is actually implementing and integrating them, both areas where a handful of simple best practices can help CFOs quickly deploy these innovative tools.

DIY or third-party: Some companies have sufficient in-house skills to identify potential AI use cases and implement them accordingly. Others are better off partnering with experienced external consultants to lead the AI charge, often saving time and money along the way. It’s up to the individual CFO to determine which route is best for their team and enterprise.

Launch testbed projects: Pilot projects allow leadership to test different strategies and technologies on a small scale, providing insights for larger rollouts.

Create a mature data strategy: Generative AI should fit into an inclusive data strategy that highlights a firm’s most valuable asset — its data. When leveraged correctly, AI-driven data business information can generate precious insights, streamline processes, and incentivize innovation.

Upskilling a team: With generative AI playing an increasingly crucial role, CFOs should consider their team’s skill level. Upskilling in data analytics, critical thinking and AI understanding should be top-of-mind when hiring new talent. Going forward, AI prompt engineering is an area where the right talent can be a significant competitive advantage.

The AI revolution has begun

Generative AI isn’t just knocking on the CFO’s door. It’s inside the building, waiting to go to work. And while it may present some obstacles in the short term, its long-term potential is unprecedented. As usual, it’s the early adopters, the leaders who both understand and embrace this extraordinary technology, that will put their enterprises at the top of the competitive pack.