Companies should be leveraging AI and automation for a successful IPO

By Adam Zoucha, Managing Director EMEA at FloQast

In recent months, there has been a marked increase in optimism around IPO activity. 40% of private company CEOs are considering IPO next year (yes, you read that correctly), and there’s a growing sense of empowerment among companies to go public. However, to fully embrace the opportunities an IPO can bring, preparation is essential.

Business leaders looking to take their organisation to IPO now have the opportunity to incorporate AI and automation in their preparation. For planning, both throughout and following the IPO process, these technologies can act not just as time-saving solutions, but also as strategic enablers. 

These technologies, when combined with human expertise and insight, can support businesses at every stage of their IPO journey, from initial market analysis and subsequent valuation to improving compliance and streamlining manual processes.

Here, we explore how organisations can put this into practice.

Streamlining regulatory compliance

Adam Zoucha

When preparing to go public, there is a plethora of regulation that business leaders will need to consider. This has the potential to turn into a serious time sink for employees and financial teams, who will need to get their heads around what’s needed, as well as execute the necessary paperwork. Complying with regulation is, however, necessary and must be robust enough to withstand investor scrutiny. Failing to comply can have serious financial impact; and lead to legal issues and reputational damage.

To help manage employees’ workload, expedite processes, and minimise the risk of errors, automation can assist by eliminating manual tasks and the heavy lifting associated with compliance procedures.

The right tools can automate data analysis and monitoring to ensure that the IPO process adheres to the relevant laws and standards. And, with an ever-evolving compliance landscape, AI can help teams adapt swiftly and effectively.  In this sense, intelligent compliance systems can actually add value to organisations, by helping to identify and address potential issues before they become compliance challenges.

Due diligence and analysis

Technology can further reduce the burden of manual tasks by automating a wide range of IPO preparation processes – it can also efficiently analyse data to support finance teams looking to report a clear path to profitability. Some examples include AI tools that can rapidly analyse multiple datasets and relevant information in contracts, legal documents, financial statements, and other critical documents. This helps to reveal potential risks, mistakes, or issues that require human attention. It can also help analyse trends, financials, market conditions, or even investor sentiment to predict the best time for a stock launch.

Being able to access all these insights quickly enables companies to react rapidly to market dynamics, and enhances the accuracy, transparency, and efficiency of financial processes throughout and following the IPO process.

Adding value with AI and Automation

Keeping investors happy is critical when preparing for IPO. To maintain trust and ensure success, it is both important and necessary that businesses avoid red flags such as the late closing of quarterly accounts. Likewise, the information businesses provide must be accurate and complete.

Improved processes and the adoption of automation can be a game-changer for accountants, lifting hours of manual tasks from their to-do list, helping to streamline the process and keep teams on track as well as ensuring greater accuracy.

What’s more, AI tools can also monitor and analyse social media and news articles for insights into the company’s public perception, which can then be used as evidence of a business’s success.

Whilst better tech and AI specifically can support IPO preparation, it is important to qualify that the regulatory landscape concerning AI is constantly changing with ongoing concerns about data security and misuse. Therefore, companies need to align their practices and use of AI with current regulations to protect financial information, and uphold trust and openness with their clients and stakeholders.

Uniting AI with human expertise

Automation works well for repetitive tasks, for example, data entry, coding or data analysis. In these tasks, it can save vast quantities of time and demonstrate efficiency, accuracy, and the ability to handle large volumes of data. Importantly these tools free up accountants’ time so they can be applied to other skilled or more strategic tasks.

Whilst a useful tool, it’s important to point out that AI is just that – a tool. In every use case, the ‘human touch’ is absolutely still necessary for checks and balances, and for decision-making. AI is a tool that enables the people working at companies, not their replacement.  

Well-performing companies prioritise transparency, risk mitigation, and adherence to legal standards. These are even more necessary when going through an IPO, when companies are even more focused on building investor and public trust.

Companies looking to go public in 2024 should be considering these innovative solutions as they start their journey. Those who prioritise the strategic use of AI and automation in the planning and execution of IPO could see significantly improved speed, efficiency, and accuracy, and ultimately a successful IPO.


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