Conversations lately with folks in the startup finance ecosystem usually turn to AI within a few minutes. This makes sense, given the tremendous attention and capital flowing into AI startups right now. But like earlier ground-shifting moments in tech (i.e., the internet), AI currently means vastly different things to different people. It’s just a chatbot for the masses to some, and the end of human engagement in finance to others. While virtually everyone agrees AI will be hugely transformative for the finance function at startups, the opinions diverge pretty quickly when you ask what, precisely, will be transformed. Will it be the people or will it be the process?
…we think AI’s impact on what we do will take two very promising forms.
Burkland has been utilizing AI and machine learning for years, and we have a standing AI working group charged with exploring the cutting edge of this technology. It’s already paid dividends for our clients, but it’s also provided us with a window into what, exactly, AI represents to the startup finance function. And it’s not what you think – instead of the doomsday predictions of legions of unemployed accountants, we think AI’s impact on what we do will take two very promising forms.
AI Elevates the CFO’s Value
First, we think AI ultimately elevates the CFO’s value by delivering more information in greater detail faster and with higher accuracy. If the CFO sits at the nexus of accounting, metrics, forecasting and planning, then any system – whether an automatic accounting solution like Puzzle or an FP&A suite such as Mosaic, that brings data and information into the mix faster and cleaner is a win. In a world where AI can rapidly analyze large amounts of disparate financial data sets for trends and insights, the CFO is freed to intellectually focus on the interpretation and conclusions of the analysis instead of the creation and provision of it. Far from being a threat, we think AI will be an incredibly effective tool that elevates the CFO’s inherent ability to make informed strategic decisions.
AI Supports Bookkeeping & Accounting
Secondly, as DJ Marini wrote in his recent blog post, AI is already supporting the work of our bookkeeping and accounting team. Far from disintermediating the humans, AI is helping them identify patterns in our clients’ financial data, find anomalies and bringing greater efficiency and accuracy to routine financial processes. All of this helps the client’s finance team; it reduces the time it takes to turn around numbers and, crucially, lowers the risk of basic human error in financial statement prep. If the CFO is the high-beam headlights at a company, accounting is the rear-view mirror – and AI will make the former brighter and the latter sharper.
The premise that CFOs will suddenly be made redundant by AI is overblown. A good startup CFO brings wide experience, prescient judgement and the ability to communicate coherent, astute financial observations and forecasts to a company’s stakeholders. Particularly for startups, AI won’t usurp the role of the CFO. Rather, it will dramatically improve the quality, cost and character of the information on which CFOs rely. AI won’t replace the CFO interpreting quarterly results in a board meeting any time soon, but it very well might make the job of accurately compiling those results easier and faster. That’s what’s truly transformative about AI in startup finance – and CFOs that embrace the opportunity will be best positioned able to deliver high-impact strategic value to their companies.