Money Matters

How to keep your cash flow in check with AI

Managing cash flow is one of the biggest challenges a business can face but there are tools that can improve financial processes.

Keep on top of your financials to stay ahead

Cash is king, or so they say in business.

The more financially liquid a business is, the better the chance of survival.

For organic growth, cash must flow back and forth freely within the business, meaning employees have to be paid on time and clients have to pay on time.

Artificial intelligence and automation are the latest big things, playing a role in everything from hiring a suitable candidate to carrying out small administrative or accounting tasks in the office.

Small businesses are also becoming increasingly optimistic with regards to the role AI could play in business growth, and in monitoring cash flows in particular, to ensure payments are made on time, according to research by Adecco UK.

The report commissioned by the recruitment agency found that larger companies employing more than 5,000 staff are almost twice as sceptical about the business impact that AI can have compared with smaller companies employing 250 people or fewer.

Additionally, 9% of the former believe AI’s impact won’t be significant, compared with just 5% of SMEs.

Fast insights, deeper relationships

There are three key benefits that small and medium-sized enterprises (SMEs) can gain from cash flow AI and automation:

  1. The potential for a low-cost, accessible way to get insight from data faster, enabling businesses to make better decisions.
  2. In retail markets, predictive algorithms are being used to anticipate what a customer may buy next.
  3. Cash flow AI provides ways to improve and deepen relationships with customers through greater personalisation without having to employ large numbers of staff to provide a personal touch.

These benefits for SMEs are reaffirmed by Dean McGlone, former sales director at finance automation company V1, and now chief revenue officer at Talos360.

He says: “With sophisticated technologies, any SME can improve efficiencies in its finance department.

“It is possible to move from manual paper-driven processes to automated digital ones, and change processes that would often be too difficult and time-consuming to achieve without technology.

“For example, it might be difficult to centralise Accounts Payable [AP] without technology due to geographical distances and potential delays in supplier payments but, with cognitive capture and intelligent workflow, concerns around geography and delays in payments are negated.”

Dean also believes the process of automation gives teams more time to focus on higher-value activities and “leads to SMEs changing their requirements for finance team members to include higher skillset levels”.

“Automation for our accounting”

Alex Boothman is founder and CEO of MyLegalAdviser, an online legal marketplace helping consumers and businesses to find a lawyer.

Alex uses cloud accounting software to help with the cash flow of his small business.

He says: “We use automation to do almost all of our accounting. Our platform is directly hooked into a cloud-based accounting software service, so there’s actually very little accounting [such as issuing invoices, credit notes and settling payments] for us to do.

“Lots of businesses probably don’t realise they could streamline this part of their accounts process by using some good accounting software and hooking it up to their other apps.”

MyLegalAdviser also uses automation to chase up and flag old debtors.

Alex says: “A couple of gentle nudges is often all that’s required to get an outstanding bill paid, but if not it’s important you’re aware of overdue bills so you can get on the phone to the client.”

Integrating cash flow AI and automation into your small business seems to be a win-win situation.

The rise of the chatbots

Some SMEs have integrated chatbots to help with customer support and the whole feeling of “customer experience” by having what appears to be someone answering your queries in a 24-hour “live” environment.

This branch of improved customer experience is popular in India, according to a study conducted by Forrester Consulting, commissioned by software and services provider company Amdocs.

Consumers in India love the speed and convenience of chatbots and more than 93% of consumers engage with them between once a day and once a month.

However, there is a downside. Some consumers believe chatbots don’t provide a very personalised service and are not well adapted to answering complex requests.

So is the big conundrum for SMEs in the next five to 10 years going to be “do or die” when it comes to cash flow AI innovation?

Chirag Shah, chief executive of Nucleus Commercial Finance, an alternative lender to SMEs, says: “When it comes to artificial intelligence, it does have a role to play in business, but it is still developing.

“Where AI technology can excel is in data mining or trend analysis from historical data and this can be used to make calculated decisions, for example, regarding risk.

“There are limitations, however, as most AI needs to be trained to act within certain parameters. When making certain financial decisions, businesses would be wise to combine the benefits of AI, with the flexibility of human input.”

How can AI help your business?

Automation with cash flow AI

Cash flow AI can help your businesses with a variety of basic accounting tasks, such as preparing invoices for clients and receiving them. By doing this, cash flow within your business can be improved.

AI can also assist you with a variety of basic administrative and marketing tasks, such as updating your customer records or sending out targeted promotions to existing and potential customers.

Customer communications

Incorporating a super responsive chatbot within your business can improve or build upon customer relations.

A chatbot can be on hand 24 hours a day answering simple queries or providing reassurance or information to your customers.

Staff solutions

AI can play a role in you hiring potential candidates for a job by opening up the candidate search far wider than a human can.

It could be used to screen a potential candidate’s personality by analysing key words in their social media posts. However, it is debatable whether AI could replace the manual, and human, need to interview a candidate face-to-face.

In the future, why not invest in an AI-powered personal assistant? It can help you arrange meetings quickly and efficiently, stay on top of deadlines and arrange your business travel.

Email efficiency

Similar to a chatbot, a product can scan the content of your emails and suggest suitable replies, without you spending hours thinking of a long-winded answer that takes a lot of time.

However, there could be a downside.

If your business is a client-facing one, you might feel the need to personalise your email responses to retain business.

Are you using AI or automation in your business to save you time and help you deal with your cash flow? Let us know your stories in the comments section below.

Editor’s note: This article was first published in November 2017 and has been updated for relevance.