Artificial intelligence has proven itself in many fields. The Council of Europe defines it as "a discipline [...] whose goal is to have a machine imitating the cognitive abilities of a human being". But do you know how it can help you in your Cash management?
We have heard a lot about the digitalisation of the finance function with the use of different software (TMS, ERP, BI...) in recent years. Now it's the turn of AI and its different levels of automation to be used by treasurers.
We will see how these existing technologies can be applied to treasury, and more specifically to Cash flow forecasting.
The evolution of artificial intelligence
Artificial intelligence (AI) requires high quality and easily accessible data. In order to make good use of it, it needs to be collected, consolidated and cleansed.
Today, a large amount of data is collected, without being properly processed. Indeed, human beings are not able to manage so much data. This is where AI comes in.
There are different branches of artificial intelligence, including machine learning and deep learning.
What is machine learning?
Le machine learning est un apprentissage automatique qui identifie des tendances. C’est-à-dire qu’un algorithme apprend de lui-même, en analysant un volume de données qu’un être humain ne pourrait pas traiter.
Thanks to this, the algorithm can make predictions, and therefore forecasts.
What is deep learning?
Deep learning is even more complex than machine learning. It is an autonomous learning with algorithms that evolve the processing of data. The algorithm learns in stages, also called layers. Deep learning is composed of an artificial neural network organized in layers. At each step, the algorithm will take into account a new characteristic of the data. For example, if we want to teach the algorithm to recognise dogs, it will evaluate each characteristic one by one. At each step, it will take into account the previous one and will be able to absorb a large amount of data.
Forecasting Cash flow with AI
Alors, quel rôle l’intelligence artificielle joue-t-elle dans la gestion de trésorerie ?
Comme vous l’aurez compris, l’intelligence artificielle permet de traiter rapidement un grand volume de données. Tout en automatisant de plus en plus l’apprentissage. Plus l’algorithme va absorber de données, plus il va apprendre à les analyser de façon autonome.
Dans le contexte de la fonction finance, l’IA revalorise le travail des financiers en prenant en charge les tâches chronophages. On pense notamment à l’automatisation du traitement des données comptables. Pour cela, elle peut s’appuyer sur les données des TMS, ERP et BI pour analyser les flux historiques et améliorer son apprentissage. Il en va de même pour les données bancaires et l’analyse des transactions historiques.
Artificial intelligence data processing allows:
- Better visibility into Cash receipts and disbursements. As a result, the financier can identify the company's financing needs.
- Une meilleure gestion du Cash immobilisé. Selon les tendances ou saisonnalités identifiées, le Cash pourra être optimisé en l’investissant dans d’autres activités par exemple.
- L’étude de la solvabilité de l’entreprise pour choisir les meilleures lignes de crédits. Ceci permettra de prendre les bonnes décisions tout en réduisant les risques.
More globally, AI allows to improve Cash flow forecasts and to optimise the resulting actions.
What to remember?
Artificial intelligence is proving to be a valuable ally for finance departments. It enables teams to save time in their day-to-day operations. As well as improving processes already in place.
Attention : il faut néanmoins prendre en compte les limites de l’IA. Se basant sur des données historiques, ses prévisions sont à relativiser face à des événements imprévus (COVID-19, guerre en Ukraine…).
D’où le besoin d’avoir un contrôle humain.
The involvement of business experts remains necessary in the use of artificial intelligence. Its goal is to help financiers make faster, more informed decisions. AI takes care of time-consuming activities with low added value, to revalue the finance function.
The application of new technologies to cash management represents the: the future of the finance function.
In the meantime, discover how our tool facilitates Cash management.
Article written by Eléonore Berne, on 11/07/2022.
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