The Trial Balance is CFO.com’s weekly preview of stories, stats and events to help you prepare.
Part 1 — Finance teams are losing some productivity gains verifying AI outputs, according to IDC-Sage report
Artificial intelligence tools have the potential to trim both hours and dollars spent on tasks for finance leaders, according to Sage CTO Aaron Harris, but any savings come with a catch: Teams are still spending some of that time saved verifying AI outputs.
Like many before it, a new report published Monday by International Data Corp. and commissioned by Sage aims to identify and quantify lingering operational issues in the rush to implement AI systems across companies. Titled “The Emerging Economics of AI in Finance,” the report revealed that finance leaders are spending, on average, 13 hours per week verifying outputs by AI tools.
In terms of dollars, those hours equate to about $78,000 consumed annually per senior finance professional, assuming an “all-in compensation” of $250,000 for such an employee.
The study is based on a survey of over 2,000 senior finance leaders, including 832 based in the U.S.
According to the report, 48% of respondents said they spend more than 15 hours per week verifying AI outputs, while 19% spend over 30 hours per week on it. The report’s writers said the latter scenario is “the level at which AI creates more work than it saves.”
The IDC-Sage report defines these lost hours as AI’s “verification tax.” In an interview, Harris maintained that teams are, theoretically, still saving more time than they’re losing. Per the report, respondents, on average, estimated that they would lose about 26% of projected productivity gains to “reverse-engineering AI outputs so they can be explained to stakeholders.”
“A 26% tax still leaves you with 74% return, which is pretty significant,” Harris said. “But the focus needs to be on reducing the 26%.”
Harris also said it’s “very expected” that humans would shift from being “doers to reviewers” in the wider arc of technological adoption.
Whether finance teams are ready for fully autonomous operations remains an open question, for now. The IDC-Sage report noted that just 4% of respondents are “running largely autonomous finance operations, while 62% remain primarily manual or rules-based.”
“When it comes to compliance related work, when it comes to reporting to stakeholders, there’s no tolerance for inaccuracy,” Harris said. “That is an instant loss of credibility.”
The IDC-Sage report also emphasized the need for “explainability” by AI tools, and drew a distinction between “black box” tools and “glass box” tools. The former gives an output with little or no explanation behind its decision-making, while the latter provides an output with a clear rationale that a user could ask questions about. Per the report, finance leaders are in favor of the former.
“Seven in 10 finance leaders agree that their organization would intentionally limit AI autonomy if they could not obtain real-time visibility into the agent’s logic or a robust post-hoc audit trail, with 71% saying they would veto a 99%-accurate AI tool that could not produce a human-readable reasoning trace for every decision,” the report stated. “And 71% agree that the lack of AI transparency fundamentally undermines their ability to fulfill their fiduciary duty to the board.”
And for all the hype surrounding agentic commerce, Harris suggested it may take some time and continued technological advances before businesses are comfortable doing things like paying invoices autonomously.
“That’s a level of risk that humans are uncomfortable with,” he said.
Part 2 — This week
Here’s a list of important market events slated for the week ahead.
Monday, July 6
- S&P final U.S. services PMI, June final
- ISM services, June
Tuesday, July 7
- U.S. trade balance, May
Wednesday, July 8
Thursday, July 9
- Initial jobless claims, week ending July 4
- Existing home sales, June
Friday, July 10 — None scheduled.
Part 3 — Quote of the week
“I’ve worked for one CFO in my career, and that’s Tim Quinn at People Inc. He’s been a phenomenal mentor. What stands out most, though, isn’t just how he thinks about finance. It’s how he uses finance to build consensus and lead people. Being a good steward of capital is important, but the human side of leadership and the strategic side of the role are just as important. That’s what I’ve admired most about him, and it’s something I hope to emulate as I grow into this role.”
Michael Friedman
CFO, American Operator
Michael Friedman, chief financial officer of American Operator, talked to CFO.com about who he turns to for advice in his first CFO role, what he thinks private equity gets right and why he believes a different ownership model can strengthen American small businesses.
