Would you let a robot manage your business finances?

It’s already happening across the globe as more consumers warm up to the idea for their personal finance needs. As consumers continue to drive the trajectory of fintech with demands for more convenience and a better experience, more providers are teaming with tech firms to develop algorithms to automatically manage portfolios.

Is this a financial fad or the future of personal investing? How does this type of technology impact business finance and money management? Which is better – a human or a robot?

The answer to these questions is the same: it depends on your preference. The latest advancements are revolutionary in that they open a new world of options for small and medium-sized enterprises (SMEs) at any accounting expertise level. Here’s how.

The rise of the robo-advisor

Investment automation is a more cost-efficient way to invest money because it replaces costly consulting hours with adjustable algorithms based on the customers’ preferences.

Robo-advisor technology is catapulting the personal finance market, with peer-to-peer (P2P) money transfers trailing behind. The US market alone is set to increase 38% to $1.5 trillion by 2022, and currently holds 68% of the global market share. Meanwhile, Europe is the second largest with 11%.

Use of a robot for your small business

Automation and machine-learning technology is spilling into the small business landscape as well. In our report Tech-Savvy Businesses do it Better, our research with IDC shows 57% of small business owners see digital transformation as an opportunity to improve efficiencies throughout the business, i.e. to differentiate from competitors and tackle general admin tasks.

Some trending examples of this: payroll software to manage paying your employees, intelligent customer relationship management (CRM) systems, and chatbots for your customer service.

Additionally, our research shows that globally SMEs are looking to digitalise accounting and money management (generating, processing, and accepting payments and invoices) admin tasks – specifically, those that are either juggled in-house or handled by an accountant.

Artificial intelligence and machine-learning technology has led to the creation of smart assistants and chatbots apps that allow you to manage your finances through a virtual assistant. If you are a time and resource-strapped business, you can keep a real-time account of your expenses, track incoming payments, and automatically balance books through voice or text command.

The more you interact with the chatbot the more intelligent it will become, adapting to how you work and providing you with recommendations tailored to your business.

New electronic invoicing technology can help your business to get paid faster and track invoice payments better. Machine learning alerts you when your customer receives, opens, and pays your invoice and automatically updates your stock items.

Benefits of using tech when managing money

How clear is your firm’s financial “big picture”? How far in advance can you spot a change in cash flow? More than 50% of SMEs currently experience or expect to experience negative impacts on company investment, paying suppliers, and staff bonuses.

Because emerging technology uses your firm’s automated data to generate predictions and analysis, you have the insights you need to make better, more informed financial decisions:

• Less time crunching numbers, more time applying them to your business’s growth
• Identify potential cash shortages so you can contact your suppliers in advance
• Identify cash surpluses in advance to plan for ways to re-invest into your business, i.e. new equipment, more stock items

Thinking of digitising your money management process and saving yourself some time? Here are a few tips to help you specify what you need in a solution:

• Identify the day-to-day tasks that are using up too much time or not delivering the right outcome. This could be manually updating data for paid invoices, tracking transaction history, or generating invoices. It’s important that these features are a part of your solution offering to truly feel the benefits.

• How would you want to interact with this technology? Are you or any of your staff already comfortable with the necessary mobile device and/or app? How easy would it be to train users? Is it a plausible enough habit change to make your transition seamless? Consider if your potential solution is a sustainable and achievable option.

• What are the customer-facing factors with each option? If you’re looking to digitalise generating invoices, what does the customer experience entail and how easy is it to use? Are there additional bells and whistles like invoice customisation?

This new technology for small businesses is taking off because it helps you get back to doing what you love: growing your business. With the right solution, you can manage your business finance necessities without losing focus of the other aspects of running a firm.

Have you implemented digital technology within your small business already? Let us know how you are getting on in the comments below.