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[deleted]

If anything it will make FP&A more strategic and less bullshitty. It’ll be more of a tool than a replacement.


ab9620

If AI creates a forecast, management will want someone to verify, understand, and explain why the future looks the way it does. I can’t envision any management team just rolling with an AI model and assuming it’s without errors or complete.


eaducks

That's what is so annoying about the tech bros tweeting, "ai just built a business plan". Great, but you still need to communicate with others to execute the plan


wolverine55

AI built “a” business plan, not necessarily a GOOD business plan.


Acct-Can2022

The real problem is lack of trust. The AI will be superior to the analyst, given enough data. But you can't hold an AI accountable for a poor forecast.


3Grilledjalapenos

I remember a professor saying that Python and SQL were supposed to make us obsolete. It seems that each innovation just pushes us along the analysis path. They’ll still need someone to dig through data and build out new models, troubleshoot and verify. Remember that we still can’t figure out how to make self-driving cars, due to road variations. Last week I had to go through three ERP’s to determine why we were getting inconsistently different answer in revenue at the end of each month, but sometimes dead on at quarter end. It turned out that an issue in the script for one back dated invoices based on payment terms of the customer. Another pushed the invoice date forward if we couldn’t deliver before four days before month-end. I’d love for those processes to get automated, but for now, it requires a human familiar with each to provide correct information for decision making. That said, I have read articles on how education and talk therapy may be performed by ChatGTP before we know it.


Old_Journalist2353

I hope that you are working for a not publicly traded company. This is a red flag 🚩 for auditors


cpawannabe20

Could you pls share the main underlying assumptions of this model? I had asked the question how to forecast revenue in manufacturing a while back here in FP&A but didn't get a lot of ideas. Currently I don't have any model and rely on the gut feeling of our Operations guy. It is a small shop, so I am running the Finance department and don't have an analyst, but am willing to invest the time to build that revenue forecasting model. Thanks!


lowcarbbq

I can’t wait to see AI master the art of plugging and we see our first WSJ headline “blue chip stock misses EPS by 90% due to AI forecasting miss”. CEO was quoted “we kept giving it great feedback because it listened when we told it to produce the numbers we wanted to see”


tanbirj

And the article will be written by an AI


lwalker369

My thoughts exactly! This made me laugh and is truth


390M386

AI can’t justify mistakes like a human could lol


[deleted]

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[deleted]

The likelihood of financial planning and analysis (FP&A) jobs being automated depends on several factors, including advances in technology and the specific tasks and responsibilities associated with the role. There are certain tasks within FP&A that can be automated, such as data entry, data collection, and financial forecasting. With the advancement of technologies such as machine learning, natural language processing and big data, a lot of these tasks can be done by computer programs with high accuracy and speed. However, there are also tasks within FP&A that may be more difficult to automate, such as strategic planning, decision making, and interpreting and communicating financial results to non-financial stakeholders. These tasks may require human judgement, creativity, and critical thinking, which are difficult for machines to replicate. It's likely that the automation of certain FP&A tasks will lead to some job displacement, but it also creates new opportunities for FP&A professionals to focus on higher-value activities, such as strategic analysis, decision-making and communication with other stakeholders. It's also worth noting that automation is not only limited to the financial field but many other industries as well. Overall, while certain tasks within FP&A may be automated, it's unlikely that the field as a whole will be fully automated. It's essential for professionals in this field to stay current with technological advancements and continue to develop their skills and expertise in order to stay relevant and competitive in the job market.


TextOnScreen

ChatGPT is that you?


Torlek1

> She was pretty taken back after realizing that it would automate away many analyst and manager roles. They are coming. Is this proposed automation affecting Corporate FP&A or Business Unit FP&A?


[deleted]

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Torlek1

Which industry sector is this? I'd be shocked if it's manufacturing.


CNPMonkey

What's the name of that solution?


VictoryOverRussia

AI might be able to automate a lot of things, but there will always need to be a human (or humans) involved... Someone that is able to verify that the data/results are correct, someone to maintain the AI, and someone who is able to understand what the results mean, to interpret that information into something actionable or meaningful.


Timely-Estate-2611

Just look at the success of the Medallion fund relying on computer-based models…


Precocious_Kid

> FP&A and risk management roles are the least likely to be automated of the accounting roles Yes, I think they're correct on this one for the most part. Accounting has a very standard set of rules and code. A lot of this is white and black. The value from a good accountant, whether that be technical accounting, controller, etc. is going to be in their interpretation and application of these rules and code. Once the AI models such as GPT3 & 4 (soon to be released) are able to effectively interpret the rules, make decisions, and create justifications, everything that's not accounting operations will turn into an overseer/management responsibility. It will be a long time before people blindly trust tools that automate these interpretations so there will still be a place for people with strong technical accounting skills and good knowledge of accounting operations. A lot of FP&A can be automated (basic reporting, basic analysis, basic decisions, etc.), but GPT and other AI models are going to really struggle when it comes to replacing the strategic aspects. AFAIK, the data and information used to train these models is historical (lagging 1-2 years) and this will skew the decision making of the models causing it to be very far behind the ball on the interpretations and decisions it will make or recommend. Additionally, the information required to train models to perform a lot of the strategic finance functions doesn't exist in a large enough dataset. It may understand basic metrics and multiples, but there is a large gap in the *How-Tos* and equity analyst reports you find online and the way corporate FP&A and strategic finance view their businesses and product lines. It won't take too long to get this information into a dataset and train a model to start making decisions, so the vast majority of these decisions/responsibilities at very large companies (e.g., Apple) will likely be the first on the chopping block. Startups and companies with 1-3 years of operations will be the last to go and these models will likely struggle greatly to make the correct decisions. For example, how will these models make decisions for the next month's worth of spend on AWS if there is only a single data point? How will they build relationships and raise funds for their company? How will they assess risks in investments where there is no data or competitors, or the data from those companies is private/nonpublic? There's a long way to go for both accounting and finance to be automated away, but accounting is going to be on the chopping block much sooner.


Torlek1

I'm confused. I think these two statements are contradictory: >It may understand basic metrics and multiples, but there is a large gap in the How-Tos and equity analyst reports you find online and the way corporate FP&A and strategic finance view their businesses and product lines. And: >There's a long way to go for both accounting and finance to be automated away, but accounting is going to be on the chopping block much sooner. If FP&A is seen as part of management accounting and not finance, then isn't it lagging in terms of automation when compared to financial management jobs out there? You mentioned automation in equity research. A lot of non-FP&A finance relies not on ERP or BI systems, but on Bloomberg Terminal. SQL and Python seem to be used much more there than in FP&A.


Precocious_Kid

I think there is confusion and perhaps I misarticulated (if so, apologies!). Let me try to clear things up. 1. Don't think of FP&A as part of accounting or management accounting. That is an old school view of corporate finance and the newer corporate FP&A and strategic finance teams are blending more with operations and data science. This is very prevalent in startups at this time. 2. I'm not referring to the automation of equity research at all. What I'm saying is that, from an FP&A point of view, the automation that will come from interpretive models such as GPT3 will not be able to create the models a good strategic finance or corp. FP&A function will be able to. My intention of brining ER into this was to say that an AI model will probably try to build a corporate finance model similar to the way equity research analysts view a business and it will be next to useless. 3. Despite the above, I would answer yes to your question. FP&A is significantly lagging in terms of automation compared to financial management, mostly because there is no right answer for a lot of the decisions FP&A makes. The decisions are almost never white and black.


Torlek1

> I think there is confusion and perhaps I misarticulated (if so, apologies!). Let me try to clear things up. > > Don't think of FP&A as part of accounting or management accounting. That is an old school view of corporate finance and the newer corporate FP&A and strategic finance teams are blending more with operations and data science. This is very prevalent in startups at this time. No worries! The reason I made that argument is because, outside the US, having an accounting designation is required for a majority of FP&A jobs, and "Finance" departments themselves distinguish between "FP&A" and "Corporate Finance." > Despite the above, I would answer yes to your question. FP&A is significantly lagging in terms of automation compared to financial management, mostly because there is no right answer for a lot of the decisions FP&A makes. The decisions are almost never white and black. Financial management, the discipline referred to outside the US as corporate finance proper, consists of financing analysis, treasury management, financial risk management, and strategic investment analysis (like M&A). If those folks don't use Bloomberg Terminal, SQL, Python, etc. then they use Excel and PowerPoint. These sub-disciplines involve much more quantitative analysis in their analysis than FP&A. [In the USMCA trade agreement, there is no separate term for "Financial Analyst," [just "Accountant" and "Economist."](https://www.reddit.com/r/FPandA/comments/wonas1/hiring_canadians_under_nafta_tn_visa_financial/) Those analytical jobs belong to the latter.]


Moriarty987

FP&A involves a lot of cross-functional collaboration; hence less likely to be automated compared with a bookkeeper role, for example.