How Generative AI (GenAI) can serve as a catalyst for an autonomous close process

By Bradley Niedzielski, Audit & Assurance Partner, Deloitte & Touche LLP

Talking points

• GenAI has the potential to automate, enhance, and transform the financial close process.
• Successfully deploying GenAI to achieve a more autonomous close requires a strategic plan.
• A risk mitigation strategy based on Deloitte’s Trustworthy AI™ framework is also important to harness GenAI’s benefits while keeping risks in check.

Just over a year ago, GenAI burst onto the mainstream business scene with its revolutionary large language model (LLM) technology, natural language ability, and power to unlock data. Since then, GenAI capabilities have continued to improve due to larger context windows, multi-model models, the onset of AI agents, and other developments. This has contributed to an increasing number of companies having employed GenAI to transform a growing list of business applications, including finance and accounting processes.

One place GenAI has become increasingly relevant is the controllership function. The technology holds tremendous potential for the financial close process, which involves verifying and reconciling financial data to ensure accurate reporting. GenAI could revolutionize this process by enhancing efficiency and precision. With appropriate oversight from the controller and other experienced finance and accounting professionals, GenAI may be a financial close game changer.

GenAI’s ability to transform financial close

GenAI differs from the broader spectrum of AI technology (illustrated in figure 1) because of its ability to generate original content—with appropriate human oversight. Unlike conventional forms of AI, GenAI allows you to interact with models through natural language prompts to generate text, images, audio, and video content as well as computer code—all without having to do any programming yourself.

Figure 1

Imagine having a tool that not only helps interpret and analyze financial data during the close process, but also enables accounting professionals—from the chief audit officer and controller to internal auditors and financial reporting professionals—to enter natural language prompts that create task lists for the month-end close in accordance with company processes and procedures. Then, with further training and clear instructions, accounting team members can direct GenAI models to perform those very tasks.

These capabilities can lead to more dynamic, automated, and adaptable close procedures, allowing finance and accounting professionals to harness efficiencies that otherwise might have been beyond reach. Ultimately, this can all translate to an enhanced close process and greater financial integrity for your organization.

Managing risks

Despite its potential, using GenAI for automating finance and accounting comes with specific risks that differ from those posed by legacy AI or automation solutions. For example, GenAI models can potentially produce unreliable results—known as “hallucinations”—through processes that seem rational and well-thought-out. For this reason, accountability is a key in using GenAI. Finance and accounting team members should always review the ultimate output produced by the model.

Given these potential challenges, how can organizations make GenAI models more reliable? One solution is a powerful model architecture known as retrieval-augmented generation (RAG). RAG involves creating a domain-specific knowledge base by accessing internal information specified by the controllership function.

Simplifying controllership

These solutions can help the controllership function receive more accurate and relevant data from the model and better understand user requests. The result? The GenAI solution becomes an effective assistant for a wide range of controllership and financial close activities (figure 2). It can even automate complex processes such as robotic process automation (RPA) bots and scripts, which can, in turn, perform accounts payable (AP) close tasks such as vouchering invoices to book journal entries for monthly AP accruals. It bears repeating that the controllership function must oversee these AI automation applications and verify system outputs.

Steps to achieving a more autonomous close

The road to a more autonomous close includes these considerations:

• Create a strategic plan and proof of concept.
• Identify and focus on critical tasks that currently require human judgment and expertise.
• Introduce GenAI as a copilot to assist with and then gradually automate these tasks.
• Develop the necessary governance structures informed by Trustworthy AI™ to improve accuracy and security.
• Over time, evaluate and automate each manual close task—decreasing the need for human touchpoints and creating a more seamless and autonomous close process.

Figure 2 shows how GenAI and other AI capabilities can enhance the financial close process now and down the road.

Figure 2

What role can Deloitte play?

As organizations consider integrating GenAI into their financial processes, the path forward involves more than just the technology; it requires a strategy that aligns with your unique business objectives and operational needs. That’s why it’s important to engage a team that understands the complexities associated with automating finance processes and has the experience to implement GenAI technology strategically, thoughtfully, and effectively. To learn more, please reach out to me or your preferred Deloitte Audit & Assurance representative or visit our page.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

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