Digital transformation has moved up the list of CFO priorities this year. Some grapple with aging systems that lack productivity and efficiency enhancements. Others find the hiring cycle taking longer than expected and a lack of applicants for nonprofit accounting jobs. These and other pressures are mounting, forcing CFOs to seek alternatives via technology that can help them manage the ever-growing complexity of nonprofit financial reporting and accounting.
One way in which prioritizing digital transformation initiatives can help CFOs meet many of these challenges is through the adoption of modern platforms with AI enhancements built into the system. AI, or artificial intelligence, has now made inroads into many business applications, offering everything from easier expense approvals to automation that enhances efficiency.
How GenAI Benefits CFOs
There are many ways in which GenAI can benefit CFOs:
- Improving automation, which reduces or eliminates manual tasks and enhances productivity.
- Enhancing donor communications, which can improve donations and cash flow.
- Increasing data visibility, which improves forecasting.
Reduce or Eliminate Manual Tasks to Enhance Productivity
Many CFOs face a lack of qualified candidates for open positions. According to The CFO, 83% of senior accounting leaders report a talent shortage, up from 70% during the previous study period. Fewer students major in accounting, and many senior accounting professionals are retiring in the next 5-10 years.
To compensate for the possibility of fewer people working in an accounting department, CFOs must think ahead and incorporate automation whenever possible. Although no computer or GenAI model will ever replace a skilled accountant, technology can significantly improve the speed at which many tasks are performed and completely automate manual tasks.
Tasks such as emailing invoices, routing expense reports, and preparing data for auditors can all be automated through GenAI-enabled accounting platforms. Some may require human oversight and review, but AI-enabled systems can organize the information quickly and efficiently.
Enhance Donor Communications for Improved Cash Flow
For many nonprofits, donations are an essential cash flow component. Without a steady stream of donations, many programs cannot be funded. GenAI-based personalization and data analysis can improve donor communications and marketing, resulting in better cash flow to specific programs or to the whole organization.
GenAI can, for example, analyze donor patterns and suggest proactive communications to maximize peak donation cycles. By analyzing previous years data, an AI model can predict when marketing communications should be sent to constituents. Many AI-enabled customer relationship management (CRM) or donor management platforms can also personalize communications based on multiple data points, including the recipient’s name and past donation history. An animal rescue, for example, might send Jane Doe an email for a special spay and neuter campaign in November based on her previous donation pattern. Meanwhile, John Smith receives requests to fund a special donation drive for the cats in the rescue in December. Such personalization in the past was difficult and time-consuming; today’s AI models and computer-based digital marketing systems make it faster and easier.
By enhancing donor communications through AI-assisted platforms, nonprofits may find their donation streams increasing, thus improving cash flow.
Better Data Visibility to Enhance Forecasting
Most organizations collect a significant quantity of data which can be challenging to analyze manually. GenAI offers the ability to analyze large datasets with minimal time and effort, resulting in better reports. Such reports can be used for forecasting, making it easier for CFOs to update and adjust budgets and improve reporting to boards, stakeholders, and constituents.
The Starting Point for Digital Transformation
Prioritizing digital transformation initiatives and AI-based programs helps nonprofit CFOs in many ways. The good news is that some of the accounting and finance platforms you may be using already offer some form of AI; updating or upgrading to the latest version may also offer an easy way to add GenAI to your tech stack without spending a lot. Other options include third-party tools and platforms that integrate into your existing accounting or finance platforms.
Now may be a great time to develop a digital transformation plan. This plan can include any necessary software upgrade, including upgrades that would add GenAI to critical areas where efficiency gains outweigh potential costs. Use it as your starting point to improve your organization’s accounting and finance departments and help you achieve the margin that fulfills your mission.
Welter Consulting
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.
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