In a swift evolution, artificial intelligence (AI), particularly generative AI, has transitioned from a niche technology to a versatile solution applicable across diverse economic sectors, including non-profit accounting and financial management. Non-profits, often constrained by modest budgets and lean staffing, are increasingly turning to AI-powered financial management software for transformative improvements in both tactical and strategic operations.
Enhancing staff appeal and efficiency
Non-profits grapple with recruiting and retaining finance talent in today’s competitive labor market. The unattractive manual work involved in finance roles, such as handling complex spreadsheets and lengthy audits, contributes to this challenge. AI tools, including chatbots and digital assistants, step in to alleviate this burden. These tools can monitor data feeds, detect irregular transactions, and provide real-time alerts, reducing the manual workload for finance professionals. By automating mundane tasks like purchase-order approvals and expense-report submissions, AI allows finance teams to redirect their efforts towards higher-value activities like managing donor relationships and strategic planning.
At Pavillon Treatment Center, automation has resulted in a 50% reduction in the time spent on transaction details, enabling the finance department to focus on strategic initiatives. This shift has empowered the organization to delve into cost impacts, accreditation policies, and employee benefits, supporting the broader mission.
Accelerating the financial close
For many non-profits, the financial close process involves time-consuming clerical tasks that can stretch over weeks, impeding access to real-time information. AI-driven continuous close processes, as opposed to episodic manual closes, can significantly reduce the time needed to close the books, unlocking more time for strategic financial activities. Sage’s research supports this, emphasizing that automation in the close process allows finance teams to collaborate on higher-value tasks, instilling greater donor confidence in the organization’s stewardship.
The Koret Foundation exemplifies the benefits of strategic finance driven by automation. With an automated continuous close, the organization has streamlined reporting and budgeting cycles, enabling it to predict year-end numbers in advance and plan cash flows to fulfill grant commitments promptly.
Optimizing fund accounting
Fund accounting relies heavily on accurate time and expense capture and allocation. AI technology introduces automation by creating timesheets based on employees’ calendars and productivity applications, simplifying the allocation of time to funds, projects, or tasks. Remote employees can effortlessly submit timesheets for billing with one click, minimizing manual data entry. AI’s continuous accounting capabilities ensure real-time transaction recording, reconciliation, and adjustments, providing up-to-date financial information for non-profits.
By automating the capture of various transactions, AI enables continuous accounting, ensuring that potential issues are flagged promptly for correction. This proactive approach enhances the accuracy and timeliness of fund accounting for non-profit organizations.
The integration of AI into non-profit financial management marks a pivotal shift, empowering organizations to overcome resource constraints and optimize their financial operations. From streamlining mundane tasks to accelerating financial closes and improving fund accounting, AI offers a strategic advantage to non-profits seeking to enhance efficiency and focus on their core mission. As the landscape of AI in financial management continues to evolve, non-profits stand to benefit significantly from these technological advancements.