The finance function faces an increasingly complex challenge: managing supplier contracts efficiently. These contracts have grown not only in number but also in complexity, with some stretching over 30 pages. For many businesses, this is a daunting task. A staggering 89% of companies struggle with managing their contracts effectively. This complexity underscores a critical need for innovation in how finance teams handle compliance checks. Enter AI-powered compliance check, revolutionizing the way finance teams operate by inverting the traditional finance function pyramid.
The Traditional Approach: Time-Consuming and Error-Prone
Traditionally, reviewing contracts and matching them against invoices has been manual, and labor-intensive. Finance teams spend an average of 92 minutes per contract scrutinizing details to ensure alignment between contract terms and invoice information.
For instance, a common discrepancy might involve payment terms, where a contract specifies ‘Net 60’ but an invoice lists ‘Net 30.’ Manually identifying such inconsistencies is not only time-consuming but also prone to human error.
The manual approach often leads to bottlenecks in the workflow and an increased risk of mistakes. With the volume and complexity of contracts increasing, this traditional method becomes increasingly unsustainable. The need for a more efficient solution is evident.
AI: A Game Changer in Compliance Checks
Artificial Intelligence (AI) is transforming the compliance landscape by offering a more streamlined and accurate approach. AI-powered solutions can process and review contracts and invoices at a speed and accuracy level that far surpasses human capabilities. Where it might take 92 minutes to manually review a contract, AI can perform the same task in seconds.
AI excels in automating the extraction and comparison of data from contracts and invoices. By leveraging machine learning algorithms, AI tools can quickly identify discrepancies, such as mismatched payment terms or incorrect invoice amounts. This automation not only reduces the time required for compliance checks but also minimizes the risk of errors, ensuring that all terms are adhered to precisely.
For example, if an invoice lists a payment term different from what is specified in the contract, the AI system will flag this discrepancy immediately. This allows finance teams to address issues promptly and maintain compliance without the tedious task of manual cross-checking.
Embracing the Future of Finance
The advent of AI-powered compliance check marks a transformative shift in the finance function, effectively inverting the traditional finance pyramid. By automating routine compliance tasks, finance teams can direct their efforts toward higher-value strategic activities that drive business growth and efficiency. This transition not only enhances accuracy but also frees up valuable time for finance professionals to focus on more strategic aspects of their roles.
As businesses navigate the complexities of modern supplier contracts, AI provides a compelling solution to streamline compliance checks and boost operational efficiency. The real question is: Are you ready to move beyond manual compliance checks and focus on strategic, high-value tasks?
AI-powered compliance check is redefining the finance function by offering a more efficient, accurate, and scalable approach to managing complex contracts. As AI technology continues to advance, its role in finance will expand, creating even greater opportunities for optimizing compliance and driving business success.
