AI-driven accounting: The key to efficient retail operations

Artificial intelligence (AI) provides powerful tools to improve profit margins. In the retail industry, the focus is often on increasing sales, but by paying attention to the bottom line, AI can contribute to significant cost reductions and operational improvements.

It's about changing and improving routines and processes. To achieve this, you need both an overview and insight into what's happening right now. You must map your cost structure as well as the processes surrounding them. Most of the answers you're looking for can be found in your accounting, particularly in incoming invoices.

An invoice can consist of over 100 pages and contain thousands of line items. New technology can help extract all this data, detect patterns, and create manageable structures that you can analyze.

AI = Better and More Relevant Data
By introducing AI into invoice processing, you increase the degree of automation while improving accuracy and quality. The AI engine continuously learns and extracts all the important information from the invoice, including line details, invoice and due dates, as well as potential early payment discounts.

Furthermore, AI enables data categorization across suppliers. Artificial intelligence also adds context and understanding to dimensions when extracting, sorting, and categorizing data. The result is that all potentially useful information is made available in a convenient manner.

READ MORE: This is how easily the focus can be shifted from punching to analysis

Smarter Purchasing

Let's look at a concrete example. In retail, you often operate with a mix of centralized and local purchases. What if you could map all purchases—both central and local—in near real-time, via web-based dashboards? This would give you greater purchasing power, especially if your business involves procurement across distributed locations and companies. New insights provide the basis for negotiating better agreements that benefit all locations, with better terms and potentially a larger product selection.

A 100% line-item overview of all purchases enables you to run your business more intelligently. Data capture from incoming invoices can be combined with public data for deeper insights and smarter decisions.

What if you mapped your company's entire electricity consumption and combined this data with price calculators from energy providers? In this way, not only would you have a good basis for negotiating better prices and terms, but you would also be able to monitor your energy consumption and reduce it where possible.

Active Use of Liquidity

When it comes to due dates and payment terms, there may be a hidden treasure in your invoices. Liquidity and working capital are crucial in retail, but they can also unlock opportunities. Many suppliers offer various discounts for early payment (e.g., cash discounts). These range from a few percent for early payments to over 10% if you pay earlier. This provides a good return on any available working capital, thus strengthening the bottom line.

Traditional accounts payable systems do not extract this information from invoices. AI does. The technology makes it possible to link data about cash discounts, and with information about your current cash flow, you can take advantage of the discounts when it makes sense and pay later when it's more beneficial.

For companies that deal with central purchasing worth millions of kroner annually, this can quickly lead to significant savings. This requires automation of the process. The opportunities are "fresh" and depend on real-time information. In other words, automating the processes alongside AI is a prerequisite for capitalizing on these opportunities.

READ MORE: The finance department's new reality—free from time thieves and tedious tasks

How Is It Going?

Do you have an accurate picture of the current situation? To answer that question, you need to extract data, process it, and analyze it in the right context. As a result, you are always referring to past events and figures (history), not real-time. If something changes, you must go back and spend more time and resources to understand the correlations and take action. Often, this requires time and effort from both the organization and yourself, and when you have the answer, it may already be too late.

Every CFO relies on precise and up-to-date information about their company's financial situation. AI can help you access real-time data. You (and your CEO) will have immediate insights, even for invoices still being processed. When you have access to real-time data, you can immediately act on any discrepancies. You can directly view specific areas and make better decisions based on solid facts and figures. Additionally, by using AI in accounting, you can close the books just a few days after the month ends.