Using AI to support financial management

The FD Forum is a peer-to-peer community for those working within Finance, HR and Estates Management, solely in education. It provides a unique opportunity to learn and share ideas from those working in the sector day-in day-out. Topics are wide ranging, from budgeting, telephone switchover, absence insurance, SSP and casual workers to recommendations for sports hall floor maintenance, signage and gym equipment. Set up in 2007 at the beginning of the Academies programme, it still has some of the original members; over 90% of its membership comes from referrals and organic growth and it has a consistent membership renewal rate.

A key topic at the moment amongst members is the benefits and drawbacks of using AI to assist financial reporting and planning. We delved into this further and here are answers to some of the questions we hear being asked.

Q What are the benefits of AI to school finance?

AI does time-consuming, repetitive tasks quickly and accurately, avoiding staff using their time on data entry. It provides a clear, well-structured draft budget narrative based on actual figures with the writing and calculations happening automatically. To see how it would work for you, take your most recent board report, ask an AI tool to redraft the narrative section from your figures and take a look at what comes back.

Q Does a school need dedicated AI software?

Free tools won’t connect to your school’s systems, meaning you will have to re-input the information for each task. You need software that’s permanently connected to your live figures.

Dedicated platforms have AI built into your finance workflow and it therefore automatically works from your current figures. It monitors your spending throughout the year, alerts you to potential overspending and produces regular reports without any manual input of figures.

Q What does AI-assisted budget planning look like in practice?

Instead of having to work across multiple spreadsheets requiring manual input, a dedicated platform can produce a solid working draft automatically, drawing on your school’s own financial history. You then start reporting from a reliable informed base rather than a blank page, enabling focus on budget decision-making rather than data entry. For school groups, this is very valuable as AI can produce draft budgets across several schools simultaneously and then provide a comparison.

The important word here is draft; you will still need to have an overview of the document.

Q How does AI help with reporting throughout the year?

There are two clear areas in which AI can help:

• Monitoring; figures running above budget will be immediately flagged.

• Reporting; For those writing explanations on budgeting changes who come from a non-finance background, the task can take time. AI can quickly draft an explanation in a style that fits your tone but is designed to help readers understand the situation being reported on.

The latter is an issue discussed on the FD Forum when members are trying to explain a complex financial situation to governors and trustees in a way that will enable them to have clear conversations.

Q What about accuracy, can you trust what AI produces?

AI is a tool only; it works from the information it is given, so it can make mistakes. Everything it produces should be read and checked. However, it does add a level of monitoring that can otherwise be missed. It will flag figures that look out of place, spot inconsistencies and alert you to figures that don’t match with budgets.

Q Is this affordable for schools where budgets are already tight?

AI, used correctly, will result in freeing up staff time/financial resource from data inputting and report writing. Putting a realistic cost on that time, and the case for investing in better tools, will show if it holds value.

Before making any financial decision, try the free tools first. Ask the views of your peers, such as those within the FD Forum, and you’ll receive honest views from those who have their own experiences, and they will be relevant to the sector. Finally, ask for a ‘no obligation’ demonstration from suppliers.

Q What happens to the school’s data, and what about GDPR?

With a reputable dedicated platform, your data is stored securely. Check where the servers are based, and if all information is encrypted both when it’s being transmitted and when it’s being stored. Access to the data is controlled carefully, so only the people who should be able to see your school’s financial information can. You decide who has control and access, not the software provider.

In a well-designed platform, AI works with financial totals and budget figures, not with anything that identifies individuals. This is one of the important differences between a purpose-built school finance platform and a general-purpose AI tool. Anything involving identifiable staff or pupil information should not be put into a free online tool.

From a GDPR perspective, a dedicated platform operates as a data processor. It handles your data on your behalf under a formal written agreement, and in accordance with UK data protection law. That agreement should be in place before you share any data, and any reputable provider will have this as standard.

A tool not a replacement

AI can offer genuine practical benefits for the finance function in schools, but it is wise to use dedicated platforms. However, it should be treated as a tool, not a replacement for professional judgement. Before embarking on its use, trying a free version is a good idea as it gives an understanding on the basics and allows for the development of ideas on how it would best fit your needs.

If AI is going to become part of your systems, ensure that you use a reputable provider and, before committing, consult your peers for first-hand experiences following any supplier demonstrations.