This guest post from our partner, BlackLine, explains how artificial intelligence can be a game-changer for intercompany.
Intercompany has always been complicated. In an atmosphere of changing tax regulations and supply chain and labor issues, non-trade activities have their own special set of challenges. Combine these complexities with the fact that many intercompany transactions are performed manually, and it becomes clear that enterprises are in dire need of transforming their intercompany operations.
Performing intercompany tasks using conventional methods, such as working with manual spreadsheets and processing data using ERPs with limited automation capabilities, leads to exceedingly high transaction failure rates. These failures result in billing, reconciliation, and settlement delays while adding time, inefficiency, and frustration to an organization’s intercompany operations. And, since staff spends so much time matching and resolving problematic transactions, many organizations struggle to maintain capacity levels.
These challenges have led enterprises to examine solutions for intercompany enabled by artificial intelligence (AI), or at least what promise they hold. Fortunately, AI is no longer a headline-grabbing, seemingly futuristic phenomenon.
An Intercompany Game Changer
What is it about AI technology that has the potential to change the game for intercompany? In a way, it’s the ability to predict a reliable future. That is, AI-enabled solutions promise to guide organizations on how to set up and optimize transactions throughout their journey and avoid issues downstream.
This might seem Minority Report-esque (the 2002 Tom Cruise film in which law enforcement is able to predict crimes before they happen), but this technology can bring unprecedented visibility to intercompany functions, allowing teams to leverage insights and perform operations correctly and efficiently and avoid frustrating delays and disputes that would otherwise crop up in a conventional intercompany ecosystem.
An AI-enabled intercompany solution should:
- Incorporate predictive analytics. The solution should be designed to learn from customer behavior data. After analyzing transactional and operational process data, it can predict where issues may arise and pose risks to close processes—before transactions are booked.
- Provide accurate, immediate feedback. The solution should provide organizations with immediate feedback for any transaction set, highlighting high-risk transactions, explaining the risk factors, and offering guidance on what corrections should be made to facilitate precise, efficient, error-free processing.
- Centralize and standardize transactions. The solution should tackle intercompany problems by treating them as extensive accounting data sets housed within an intercompany “subledger,” each of which possesses unique lifecycle characteristics associated with a given corporation.
BlackLine’s Intercompany Predictive Guidance
BlackLine has now developed the first AI-enabled, predictive processing capabilities as part of our intercompany financial management solutions.
Applied AI is at the heart of BlackLine’s Intercompany Predictive Guidance technology, empowering it to become familiar with each customer’s accounting behaviors at a granular level. By leveraging this technology, companies can dramatically reduce or even eliminate transaction failures, achieving significant time and cost savings on a global scale.
When the AI application analyzes an organization’s transactional data, it predicts where issues are likely to arise and pose a risk to financial close processes—before the transactions are booked. Specifically, it can:
- Highlight high-risk areas
- Explain risk factors
- Show accounting teams where immediate corrections are possible
- Provide guidance for future transactions
While most automation and streamlined workflow capabilities should reduce failure rates, by using BlackLine’s AI-enabled technology, companies can dramatically reduce, or in some cases eliminate, their transaction failures, achieving significant time and cost savings.
Broader positive impacts of Predictive Guidance include helping enterprises better plan mergers and acquisitions and improve capacity development, as team members spend less time resolving transactional issues and more time making meaningful, strategic decisions.
Newly Realized Opportunities for Intercompany Success
BlackLine’s Intercompany Predictive Guidance changes the intercompany game by preventing potential issues before they happen, dramatically improving business outcomes. Fortified with this groundbreaking technology, today’s enterprises no longer need to be content with just learning about the potential of AI. They can begin to benefit from AI capabilities in their intercompany business practices.
This blog post was originally published on the BlackLine blog.