AI isn’t ready to dominate every industry yet, but those in financial operations can take advantage of significant functionality. In particular, AI excels in collating large datasets, analyzing information, and providing actionable insights. Here, we’ll focus on how AI-driven contract insights can transform all of your financial operations.
The Power of AI in Financial Operations
Adding AI to your financial operations means enhanced accuracy and speed in data analysis. It reduces the reliance on staff to carry out mundane tasks, leaving them available for more creative and important work. It also provides these same staff members with better insights, allowing them to make more informed decisions.
When AI powers your contract management software, it forms the foundation of every financial relationship you have within your business.
Core Capabilities of AI in Financial Contract Analysis
Your contract software will contain several different contract management tools that address all areas of the contract process.
There are four main core capabilities of AI in financial contract analysis:
AI collates data from a wide range of sources so it can be easily consumed.
AI analyzes data, producing a report similar to the spreadsheets you probably make already.
AI offers actionable insights and recommendations based on the analysis.
Predictive AI makes forecasts, allowing you to act proactively to take advantage of opportunities or avoid risks.
How To Transform Key Financial Processes With AI Insights
Once you have your AI contract management system set up, you will quickly see improvements in these four areas.
Optimize Vendor Selection and Negotiation
Artificial intelligence helps you manage vendor selection by notifying you when contract renewal dates are approaching. This helps you start your search promptly and use contract lifecycle management best practices from the beginning.
AI also reduces the workload on your legal department when selecting a vendor. Legal teams no longer have to spend time vetting vendors for compliance. AI tools can quickly and accurately ensure that all potential vendors are fully compliant.
AI can then offer data-driven insights, comparing all vendors against your specific benchmarks. These insights are produced in real time and analyzed against current market conditions to rank potential vendors accurately. This wealth of market information puts you in a powerful position for contract negotiations.
Once you have a shortlist of vendors, AI will offer dynamic negotiation strategies that can be updated as new vendor pricing information comes in. You can use these contract insights to optimize contracts and make the best possible deals.
Automate Invoice Matching and Payment Processing
Contract management software uses AI to streamline invoice matching and payment processing. This can be a time-consuming and monotonous task for humans, often resulting in a demotivated workforce that is more prone to errors. AI can do this more efficiently and accurately, freeing up your workforce for more creative tasks.
AI excels at pattern recognition, which means it can easily spot anomalies that raise suspicions about fraud. Tracking and highlighting these incidents in real time allows you to act quickly to prevent financial loss. This risk reduction decreases monetary loss and increases your confidence in your payment processing system.
Contract analysis software can also ensure compliance on your end. Notifications make sure you adhere to payment terms and regulatory requirements, reducing the risk of penalties and fines.
Generate Accurate and Timely Financial Reports
Business teams have traditionally spent considerable time pulling together data to produce timely financial reports. A contract manager may then review this document for accuracy, consuming valuable staff time and resources.
AI saves time by automatically collecting financial data from multiple sources and combining it with contract analytics. Once the data is consolidated, AI tools can then cleanse it and check for anomalies. These automated checks provide data accuracy and compliance.
These new systems will actually change how you define a financial report. It's no longer a static document that you painstakingly put together once a year. It is now an interactive dashboard that you can analyze at any time to get specific insights. Whenever you need a report, you can generate professional documents using rule-based templates that are fully compliant, regardless of their purpose.
More than that, predictive AI can use all of this current and historical data to make accurate forecasts. This encourages better decision-making among business teams.
Identify Cost-Saving Opportunities
When your contract lifecycle management software uses AI, you can quickly identify cost-saving opportunities from various angles.
First, your contract analysis software can look within your contract repository to find your best and worst-performing contracts. The top performers will provide benchmarks, and your AI tool will look for patterns to identify improvement opportunities in your poor-performing contracts.
You can also use contract reviews to find insights from your past contracts and see how you have improved over time. Again, this historical data can be used directly by predictive AI to make better decisions on future contracts.
A more general way of saving costs is increasing the efficiency of the teams working on these projects. The beauty of AI is that you can use it to identify opportunities where AI can help you further. If your staff expenses are running out of control, AI can recommend further areas for automation, reducing the total cost of completing projects and ensuring your teams are employed where they make the biggest difference.
Get the Most Relevant Contract Insights Today
AI already has a huge impact on financial operations in many businesses. Yet not all AI tools are created equal. Terzo's platform was built to optimize contracts, invoices, and every other financial document through AI.
If you're ready to see how Terzo can entirely transform your current financial operations into a well-oiled AI machine, contact one of our experts today for a free consultation. During the consultation, we'll walk you through which AI systems will be the most effective for your business.
