How AI Drives Stronger Financial Forecasting
AI for Finance is inevitable,” says Planful CEO Grant Halloran, who recently wrote an article in CFO Dive predicting the Office of the CFO would embrace AI with open arms.
Teams using artificial intelligence (AI) can make better informed predictions about economic changes, adjust accordingly, and gain a competitive advantage in the market. They also save time and resources by automating repetitive tasks and honing in on outliers and anomalies.
Why integrate AI into your forecasting process?
AI allows organizations to maximize their data’s potential by analyzing large datasets. It considers seasonal patterns and trends to develop more accurate forecast models.
Traditional forecasting is a slow process that requires multiple inputs and is prone to error. That’s why AI can really be a forecasting hero for many finance teams. It can work faster, tirelessly, and without error to extract insights from diverse sources that manual methods might miss.
AI-enabled forecasting also learns and adapts from data. Meaning that as more data sets are analyzed, an AI algorithm can evolve and become more accurate based on variable market conditions. This adaptive nature is valuable in plenty of industries where conditions may change at a moment’s notice.
Additionally, AI can streamline and speed up complex analyses and scenario simulations. Automating routine tasks allows organizations to free up human analysts. This gives them the opportunity to focus on more strategic efforts, higher-level business planning, and critical decision-making.
Planful Predict: Your solution for smarter financial forecasting
Planful Predict enables more accurate forecasting through its AI-enhanced suite of solutions, which includes two main features: Signals and Projections.
Predict is an AI-enhanced financial forecasting tool that analyzes historical financial data to find patterns, seasonality, and trends. It uses these insights to generate predictive models to forecast future financial outcomes.
Predict’s algorithms also automatically identify potential anomalies and deviations from expected patterns. This allows finance professionals to dig deeper and make informed, data-driven informed decisions.
Identify data anomalies with Predict: Signals
Predict: Signals uses AI-driven anomaly detection to surface outliers and potential errors in data.
The innovation helps users take corrective action by reducing mistakes and providing direct visibility to adjust and validate scenario data. This ensures that forecasts have more accurate predictions and are reliable without requiring extensive manual review.
Because Predict: Signals reduces the time spent on manual, error-prone activities, it allows finance teams to focus on more strategic initiatives. For each signal, the AI engine generates upper and lower bounds and visually displays this information, providing a clear understanding of any anomalies.
Gain a baseline for accurate forecasts with Predict: Projections
Predict: Projections enables users to quickly build accurate forecasts and budget scenarios backed by AI-enhanced financial forecasting.
This capability provides a trusted baseline for financial planning cycles, allowing finance teams to link plans to business outcomes without bias. The AI engine processes historical financial data to understand trends and seasonality, helping users kickstart their strategic planning with a solid foundation. Users can then adjust the projections to align with their business strategies and needs, saving time and effort while creating more accurate plans.
Overall, Planful Predict enhances forecasting accuracy, reduces manual workload, and allows finance teams to focus on higher-value analysis and strategic decision-making.
How Aurorium builds stronger forecasts with Planful Predict
Planful Predict bolstered Aurorium’s forecasting process with deeper insights, faster anomaly detection, and more informed business decision-making capabilities than traditional financial forecast methods could.
At Perform24, Robert Franz, Senior Reporting & Systems Analyst at Aurorium, discussed the journey to implement Predict and the positive impact felt by the finance team after leveraging predictive analyses.
“Planful added a lot of data visibility, which increased trust in the data and our financial results,” said Robert. “Since Planful is tied directly to our source data, we know exactly where the numbers come from. Planful allowed us to build our financial processes around data integrity.”
Using Predict, Aurorium analyzed three years of historical financial data to forecast future financial outcomes. As a result, Predict identified anomalies in 89% of Aurorium’s GL combinations, indicating instances where actuals fell outside the normal range predicted by the model.
After completing an initial budgeting process, Aurorium applied Predict to its current year plan. Analyzing the data retrospectively with Predict allowed the team to assess how well their budget aligned with Predict’s projections. The insights provided will help Aurorium refine future budgeting processes faster than traditional methods would allow.
Moving forward, Aurorium plans to leverage Predict further by integrating Projections into structured planning templates. This integration aims to streamline the forecasting process by automating initial forecasts based on historical data and allowing human review and adjustment as needed.
Robert’s experience with Predict demonstrates that AI is more than a concept. It’s a practical tool that can easily be applied to real-world financial scenarios to produce impressive results.
The transformative power of AI in financial forecasting
AI has the power to revolutionize financial forecasting, providing benefits that enhance accuracy, efficiency, and adaptability. The technology can handle vast amounts of data while spotting anomalies, determining complex patterns, and predicting future business outcomes at speeds beyond any human’s capacity.
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