Unless you’ve been living under a rock, you’ll have undoubtedly come across the numerous articles, information, and debates surrounding artificial intelligence (AI). With its promises to make life easier, it’s little wonder that businesses, especially small businesses who lack the manpower of larger companies, are looking at how they can implement AI into their day-to-day operations.
So, is AI really the hero we’ve all been waiting for? Or is there a more sinister side to it that small businesses need to be aware of? Well, the answer (unsurprisingly) is a mix of both. Let’s look at how small businesses are approaching AI and what needs to be taken into consideration to ensure its safe usage.
What do the statistics about small business and AI say?
Research carried out by the accounting software Xero unearthed some mixed opinions about AI:
- 32% of small businesses are intrigued about AI.
- 31% of small business are nervous about AI.
- 30% of small business are excited about AI.
- 50% of small business believe AI will be more helpful.
- 20% of small businesses believe it will be more harmful.
- 1/5 small businesses were dedicating more resources to AI.
- 51% said they trusted AI tools with identifiable customer information.
- 45% of respondents said they would trust AI tools with sensitive commercial information.
Whilst there are some varying opinions here, the overall theme is that a large number of businesses trust AI already, even with potentially very sensitive information. “Isn’t this a little risky?” we hear you cry? We’d argue yes, as currently not enough is known about how secure it is.
What could AI be used for?
AI has a multitude of uses and the sky really is the limit.
Chatbots for customer enquiries: Small businesses can use chatbots on their websites and social media to answer customer queries around the clock. These virtual assistants can provide information about products, services, and operating hours, ensuring customers receive timely responses without having to wait for business hours.
Targeted marketing: Using AI to analyse customer data allows businesses to create more effective marketing campaigns. By understanding customer preferences and buying habits, businesses can tailor their promotions and advertisements to better appeal to their target audience, maximising impact without overspending on broad marketing strategies.
Efficient inventory management: AI can help manage stock levels by predicting what items will be in demand based on historical sales data and other relevant factors. This means businesses can ensure they have sufficient stock to meet customer demand without overstocking items that don’t sell as quickly, thereby managing resources more efficiently.
Advanced applications of AI can further dive into areas like product development, HR management, fraud detection, and much more, opening a wide array of possibilities for businesses to explore.
As well as these opportunities, you could also look at how AI could help you manage your finance and accounting.
Handling invoices: AI can simplify dealing with invoices by automatically sorting out the important bits like amounts, due dates, and supplier details, making it quicker to process payments and reducing manual data entry.
Keeping track of expenses: Small businesses can use AI to monitor and organise expenses, flagging unusual outgoings and offering a clear picture of spending patterns. This helps to manage money more sensibly and avoid unnecessary costs.
Predicting finances: AI can look at past financial data to predict future earnings and spending, helping businesses to plan better by providing insights into their financial future, and ensuring resources are managed wisely.
Spotting fraud: By watching over transactions and picking up on odd patterns or inconsistencies, AI can help businesses identify and respond to possible fraudulent activity swiftly, protecting them from potential financial pitfalls.
Simplifying bookkeeping: AI helps to keep the books in check by automatically categorising transactions, producing financial reports, and matching up accounts, reducing the chance of human error and lightening the administrative load.
Analysing customer credit: If a business extends credit to customers, AI can sift through data to gauge how reliable they are with repayments. This helps businesses manage any risks related to giving credit and make sound decisions about who to extend credit to.
By applying AI in these ways, small businesses can make the financial management side of things smoother and more efficient, freeing up more time to focus on the core aspects of running the business.
How can small businesses approach AI responsibly?
As useful as AI can be, it’s not all sunshine and rainbows so all businesses should be approaching it with both optimism and caution. As we’ve seen, AI can be used to streamline operations, take care of repetitive tasks, and boost overall productivity, however, it’s crucial to implement AI with responsibility and ethics in mind.
Ways to do this include:
Ensure data privacy and security
Ensuring that customer data is protected and used ethically should be a top priority – and in many instances is actually a legal obligation. Small businesses should invest in robust cybersecurity measures and comply with relevant data protection regulations to ensure that their customer’s details aren’t compromised. Tools like ChatGPT4 are able to take CSV downloads, so it’s advised that you don’t share any financial documents with AI until more is known about it. Not only is this important for data privacy, it’s also vital for protecting your company’s reputation.
Businesses should be transparent with their customers about the use of AI technologies, how data is collected and used, and what benefits it provides. This allows customers to opt in or out, as well as builds trust in your company.
Education and skill development
Whilst AI is great for helping employees with their everyday tasks, responsible businesses should use AI as a tool to enhance human capabilities, not replace them entirely. Implementing a ‘human in the loop’ approach ensures that human judgment is involved in all critical decision-making processes.
It’s also important to make sure your employees are fully trained in the use of AI tools and understand the importance of using them responsibly. This includes training in ethical practices. Training programmes and workshops can help to empower employees to understand the potential and limitations of AI. With knowledge comes the ability to make informed decisions, ensuring that AI is used in ways that align with your company’s values and ethical standards.
If you have questions about any aspect of your finances, please get in touch with the Trinity team. We’d love to help!