There will never be a financial planning process that is appropriate for every type of organization. However, this does not mean that it cannot benefit from AI, particularly as finance software becomes increasingly adept at utilizing the technology. Here’s where financial planning enabled by AI is expected to go in the upcoming months and years.
Essentially, all you need to create a profitable SaaS are two things. First is software with a market fit—that is, software that people are willing and able to purchase. A precise and thorough business financial plan is the second.
Yes, you need a marketing plan, a sales force, coffee makers, and ping pong tables (well, maybe not the last one), but you won’t be able to retain all of them long enough for the business to reach its full potential if you don’t have a sustainable plan in place for how to pay for them.
Because they have a direct bearing on a SaaS company’s financial strategy, CAC and cash burn rate are among the most carefully followed indicators in the market.
Correct financial planning enables you to make better use of the resources at your disposal, allocating funding to growth streams, reducing expenses where necessary, and focusing more on initiatives that are succeeding. Ultimately, it all comes down to making the best use of your cash.
Finance teams, particularly those operating in the constantly evolving SaaS industry, can rejoice as artificial intelligence (AI) is here to stay and offers a plethora of highly advantageous applications for SaaS financial planning.
You may spend more time on high-value activities like analysis and strategy and less time on labor-intensive manual processes like data entry and model development by utilizing artificial intelligence (AI) to speed up and improve the accuracy of the SaaS FP&A process.
AI’s Ascent In Financial Planning
The world has been enthralled by AI’s potential ever since ChatGPT entered the scene in late 2022. Even if financial planning has enormous potential, it’s important to remember that a lot of the technology that is currently bundled under the label “AI” has existed for a while.
The entire goal of Mosaic’s 2019 launch was to assist in changing the business finance function from one that was labor-intensive, manual, and historically focused to one that uses automation for low-value chores and refocuses the finance team on strategic insights on the company’s future.
The scope of this concept has expanded in tandem with the explosive growth of generative AI technology. These days, businesses of all sizes—from pre-Series A startups to Fortune 500 firms—are incorporating AI and automation into their corporate financial planning procedures.
Instead of using models and forecasting tools that were developed on top of Google and Excel spreadsheets, they are linking their company’s information sources directly to platforms such as Mosaic. It is now possible to fully automate tasks that used to take hours each week.
Finance teams must adopt AI given the speed at which its capabilities are enhancing financial planning; otherwise, they risk falling behind in a highly competitive market.
How To Use AI In Financial Planning For Businesses?
AI has turned into a bit of a buzzword, and this also applies to business financial planning. Thankfully, though, programs like Mosaic fill in the gaps between theory and reality, giving your company access to technology right away.
However, before you reach that point, you must comprehend how to employ AI in your company the most effectively, as not all SaaS are created equal. Spending effort and money integrating new technology into your company “because AI” is pointless. It must have attributes and capabilities that assist you in achieving your strategic financial objectives.
Determine Manual Procedures
This is where a thorough integration of AI financial planning should begin. You must determine which portions of your existing finance routine could be automated in order to free up time.
Tasks such as close management, data update into a central financial model, and financial data consolidation from many sources can all be greatly enhanced or completely replaced by artificial intelligence (AI).
The immediate benefits of implementing AI are likely to increase with the number of these manual procedures you already have in place.
Emphasize Previous Issues
Consider the last twelve to twenty-four months. Which issues were the most pressing for you? Perhaps it was your hasty adaptation to shifting consumer behavior or your inaccurate assessment of the effects of the Fed’s rate increases.
Now consider how you could have handled this situation more effectively or quickly. Here, AI-powered financial planning for businesses may have a significant impact. Features like thorough scenario planning let you prepare for a variety of scenarios and evaluate how they might affect your company before they happen. Additionally, since your estimates may be updated instantaneously, you can make adjustments on the spot in case something completely unexpected occurs. It will be simpler to identify how AI can assist if you have a better understanding of your risk tolerance and the kinds of security measures you have in place.
Determine The Needs For Future Planning
What will be the main factors influencing the future growth of your company? Which KPIs do you need to closely monitor in order to maintain the course of that plan? You can find methods AI can assist you in tracking and managing your development provided you have a clear idea of where you want to end up.
For instance, you might have to maintain a set amount of net profit per customer or a particular level of customer acquisition cost (CAC). AI financial forecasting software can assist you in segmenting your clientele based on these indicators, enabling you to more effectively identify areas of acquisition that may be holding you back and where your biggest chances lie.
You can identify the tech solution that best suits your demands once you’ve determined exactly where AI can enhance your company. You’ll be able to distinguish between characteristics that are necessary and those that are significant to you. Not only that, but you can also begin to compile a rudimentary understanding of the cost/benefit analysis of different solutions with an estimate of the time you could save.
Mosaic AI: The Future Of AI In Financial Planning
In actuality, the use of AI to financial planning is still in its infancy. Alright, I know that sounds corny, but it’s the truth. Netflix would still be mailing out DVDs if artificial intelligence and massive language models replaced it.
The ways in which AI fits into your company and enables your employees to work more effectively and efficiently with their time will continue to advance at a rapid pace.
At Mosaic, we identify four primary roles for which AI functionality may be used in financial planning, and we’re hard at work developing the tools and technologies necessary to fully actualize these roles.
Using AI For Data Analysis
We see AI acting as a front-line data analyst to help your professional analysts get a head start, whether it be by finding trends, detecting outliers in your data, or figuring out how a change to one aspect of your organization affects the others.
Using AI For Financial Modeling
As we discussed in this post, artificial intelligence (AI) makes it possible to create, modify, and update intricate financial models with just natural language commands. Artificial intelligence (AI) has the potential to significantly enhance your modeling and forecasting skills, whether it be by detecting mistakes in your current models, offering almost infinite “what if” scenarios, or enabling you to immediately change baseline estimates based on fresh data.
Artificial Intelligence As A Data Manager
This is straight-up number crunching, and it’s where AI fits in best for your SaaS company. Massive amounts of data may be promptly analyzed by AI, which can also handle data protection issues, transpose outputs from one software to another, detect possible problems, and give a clean data feed.
Artificial intelligence (AI) can take precise, human-written instructions and apply those rules to a variety of intricate datasets, providing you with clean, accurate data and smooth departmental and technological integration.
AI As A Planner
AI capabilities can zoom out to the large picture, even though the majority of these examples concentrate on the minutiae. When examining your entire market segment and the overall economy, the same trend analysis that can identify opportunities or abnormalities in your firm transaction history can also do so.
By incorporating AI into your company’s financial planning, you can help your executives think more clearly and extract the greatest insights from their work by giving them an automated assistant.