Over the past year, we’ve seen an endless stream of attention-grabbing headlines about artificial intelligence (AI) — most of them warning of its perils, ranging from the merely disruptive to the truly catastrophic. Despite the doom and gloom, there’s reason for some “AI optimism,” particularly in accounting and finance functions. For forward-thinking construction businesses, AI and AI-driven automation can unlock game-changing breakthroughs in productivity and cost savings.

The Added Value of AI

Construction finance roles have shifted as technology adoption has increased. More firms are catching on to the fact that tasking employees with low-value, repetitive work such as entering invoice data, managing multi-month closing cycles, and juggling 50-tab spreadsheets, isn’t the best use of employee skills nor is it the best way to attract and retain top talent. Businesses are increasingly automating this error-prone and redundant work so staff can be more strategic – and AI is taking this automation to the next level.

Not only can AI eliminate mundane tasks, but it can also transform the rapid exchange and understanding of accounting and financial information. The classic “data-in, analysis, data-out” cycle will be much easier and faster for the accounting and finance team who will gain a clearer picture into the health of the business. We can expect to see natural-language inquiries that don’t simply present a page of results – but summarize the output and present it in simple, digestible formats. AI also offers the ability to understand patterns in historical data and predict future recurrences. That means construction firms can identify opportunities and risks that may have gone unnoticed.

While the early waves of AI have displayed weaknesses and vulnerabilities that must be addressed, we’re also seeing new advantages and benefits as finance departments start to harness AI to streamline their tactical operations. AI can already recognize and categorize financial data to automate accounts payable processes, reduce errors, and increase productivity. Some construction accounting solutions even incorporate AI to review the general ledger to identify anomalies and patterns in transactions that might escape human review and merit further investigation.

Generative AI tools like ChatGPT, Google Bard, and recent updates to Bing can also play a valuable role in finance. For instance, you can ask an AI tool to summarize new changes to tax codes in different jurisdictions. Generative AI could also help answer customer emails about invoices, payments, or credit terms. Of course, you would need to ensure appropriate restrictions, reviews, and protections for these processes, which often contain sensitive information and require human judgement.

AI + Human Expertise

While AI delivers a world of possibilities, it presents pitfalls if we trust it too much and create processes that lack human intervention. Hands-off AI can be a recipe for disaster (think errors that go undetected) so human checkpoints, audits, inspections, and quality reviews are absolute requirements when utilizing AI. When AI-generated insights are combined with the expertise of finance professionals, they can lead to better decisions, better performance, and ultimately, better outcomes.

The fact is, AI leads you to strategic decision points faster. It’s unparalleled in its ability to perform research quickly and uncover compelling insights. However, a firm shouldn’t rely solely on AI to make strategic decisions. For instance, asking an AI tool “Which of these development projects will yield the largest possible return?” places too much trust in a still-evolving technology. Instead, AI is a superb starting point. Humans still think outside the box and take advantage of novel circumstances – and AI can miss those opportunities.

Of course, we must also recognize, that, despite all the hype, these are still the early days of the AI adoption cycle. Rapid and frequent improvements to the technology will address these flaws and accelerate improvements with feedback loops that help AI models get better over time.

Conclusion

AI will raise the bar for the work of construction finance departments. Instead of replacing human jobs, it will create new possibilities. Forward-thinking finance professionals should recognize that AI is here to stay, it will improve, it will offer benefits and risks, and it will eventually transform how we think about the operation of accounting and finance.