Financial Statement Analysis Financial Statement Analysis

Automate financial statement analysis with AI

Charlotte Goetz

A look at the world of finance reveals that the precise and effective handling of financial data is essential for the successful management of a company. In this context, it is important to clearly understand and communicate the difference between the balance sheet and the annual financial statements and to rethink traditional processes in order to remain competitive in the future.

Difference between balance sheet and annual financial statements

The balance sheet, as the most fundamental element of the annual financial statements, provides an overview of the financial health of a company at a given point in time by presenting its financial resources and liabilities. On the other hand, the annual financial statements provide a comprehensive analysis of the company's economic activities over the course of a financial year by showing not only the Balance sheetbut also includes the income statement and other supplementary information such as the notes and the management report. This differentiated view enables the relevant stakeholders to make informed decisions and appropriately assess the company's financial performance.

The future of financial statement analysis

Discover how you can efficiently use the latest technology to automate year-end analyses.

A new approach to automating process steps in the analysis of annual financial statements is software with AI. AI-supported systems are able to analyze large amounts of financial data in real time and identify patterns and trends - including in balance sheet analysis. This speeds up the analysis process and significantly minimizes the risk of human error.

Automation of the annual financial statement analysis with Konfuzio

The Helm & Nagel GmbH is a leading company in the field of intelligent document processing with its product Konfuzio. The IDP software specializes in extracting data from documents of all kinds. With the help of the established AI platform you will be able to automate process steps in the analysis of annual financial statements and achieve new benefits as a result.

Konfuzio uses advanced technologies such as machine learning, optical character recognition and intelligent AI algorithms to prepare annual financial statements

  • to scan,
  • to understand and
  • to interpret,

whereby relevant information and key figures are extracted completely automatically and efficiently from the annual financial statement documents. With Konfuzio, it is possible to create reports from a previously performed balance sheet analysis, which are combined with a user-friendly interface. GDPR-compliant implementation using the software is guaranteed at all times.

-> Read more about balance sheet analysis with Financial Spreading Software.
-> Read more about the free inspection of balance sheets.

Konfuzio offers its customers these services

  • Text recognition - Konfuzio can extract text from any company's balance sheet documents and convert it into machine-readable data.
  • Classification - The AI is able to classify relevant documents for the annual financial statement analysis according to various categories, making it easier to organize and access information.
  • Pattern recognition - Konfuzio recognizes patterns and trends in financial statements that are of great importance for analyzing and forecasting company performance.
  • Ease of use - Konfuzio offers an intuitive user interface that enables even non-experts or accounting professionals to perform balance sheet analyses without additional training.

Advantages of an automated annual financial statement analysis

The use of Konfuzio in financial statement analysis offers numerous advantages. These include

Financial statement analysis automation benefits
  • Time saving - Automated analysis speeds up the process considerably.
  • Precision - AI minimizes the risk of human error and provides accurate results on the financial statements.
  • Real-time analysis - Konfuzio enables real-time monitoring of financial data.
  • Fast decision making - Investors and management can make informed decisions on the basis of current data.

Use cases for process automation with AI

The following use cases illustrate AI-supported financial statement analysis in practice in various industries:

Credit scoring in the banking sector

Credit scoring is part of day-to-day business for banks and credit institutions. By using advanced AI algorithms and machine learning techniques, banks can optimize credit scoring. By extracting historical transaction data, creditworthiness information, key figures and proof of income, the appropriate AI model supports the creation of risk profiles. This enables a faster and more accurate assessment of creditworthiness, reduces default risks and improves the efficiency of the Credit approval process.

Balance sheet audit for audit firms

Audit institutions face the challenge of conducting a comprehensive and accurate annual audit to ensure the compliance and financial integrity of companies. This is another area where AI comes into play. AI systems can automate financial statement audit processes by using services such as text recognition, pattern recognition and data analysis techniques. These automated checks are performed faster and more accurately than manual ones, helping to identify potential irregularities or errors in the financial statements that a human might miss. This enables audit institutions to use their resources more efficiently while increasing the quality of the audit.

Business accounting for tax consultancies

according to HGB SKR 04 and SKR 03

National companies in Germany generally follow the standards of the German Commercial Code (HGB) for business accounting. The SKR 04 and SKR 03 charts of accounts play an important role here:

PrincipleChart of accountsDifferentiation
Process organization principleSKR 03The accounts are organized according to the operational processes. The order of the accounts follows the sequence of business transactions in the company.
Closing principleSKR 04The arrangement of the accounts is based on the structure of the annual financial statements, which comprise the balance sheet and the income statement.


Due to these principles, the account numbers of SKR 03 and SKR 04 differ from each other. KI is able to optimize business accounting according to HGB SKR 04 and SKR 03 for tax consultants. Through AI-supported data extraction and processing, FIBO-relevant documents such as credit notes, invoice corrections and invoices, for example, are automatically read out and, as a result, the invoice receipt is pre-assigned accordingly, which increases efficiency in the long term.

AI offer on the Konfuzio marketplace

The Marketplace is a central hub for trained AI models and tools. On this platform, Konfuzio brings expert knowledge, AI software and many other relevant technologies into play and brings together what belongs together:

Technical innovations combined with practical use cases.

Test our offer and see for yourself the benefits of using the pre-trained "Balance Sheet" AI model for automated financial statement analyses.

Do you need support? Choose between the following options:

-> Follow the link for more detailed background information.
-> Contact our experts via the Contact form.

What data can the AI provide for analysis?

The AI model extracts information from the annual financial statements completely automatically. If necessary, the extracted data can be adjusted manually:

Sample Document Model Balance Sheet General Information Konfuzio Marketplace
Sample document annual financial statements

Examples of extracted content, so-called labels, can be found in the table below with corresponding example values. Numerous other extractions are possible according to this scheme:

LABELDESCRIPTIONTYPEVALUE
Company name
The name of the bank for reconciliation. The company name is not normally shown on the balance sheet itself. The company name is usually listed at the top of the financial report or annual financial statements to identify the company.
Text
Volksbank XY eG
Current income3. current income from a) b) c) Current income refers to regular income or earnings that are generated continuously over a certain period of time.Number
808.736,02
Total assets
This item comprises the total value of all assets that a company owns at a specific point in time. Assets are the resources that a company owns or controls and that serve to generate future economic benefits. Total assets is an important balance sheet item as it represents the value of the company's assets.
Number2.567.876,96
Total liabilities and shareholders' equity
The "total liabilities" in a balance sheet is the total value of all liabilities and equity of a company at a specific point in time. Liabilities represent the company's financial obligations or debts to external parties.
Number
2.513.515,46
Equity
11 Equity (EK) is the difference between total assets (assets) and liabilities (liabilities, provisions), special items and deferred income (liabilities).
Number
69.487.319,94
There are many more labels according to this scheme.

Integration into existing IT structures and tools

With the REST API from Konfuzio, it is possible to integrate analyzed financial statements into any workflow, whether by automatically uploading documents you have received by email or by post-processing financial statement documents in spreadsheet software such as Excel or Google Sheets.

Privacy and security

Data protection is a top priority at Konfuzio. All our AI models process data exclusively in accordance with the GDPR and protect sensitive information throughout the entire extraction process.

Conclusion

The use of AI to automate the analysis of financial statements offers the financial sector an efficient and precise solution. Combined with other modern technologies such as those used by Konfuzio, it enables fast processing of financial data from any accounting system, minimizing errors and saving time. The diverse functions of the AI platform and its possible integration into a company's existing IT structures make Konfuzio a valuable tool for making well-founded decisions based on current data within the company.

By complying with data protection standards, Konfuzio guarantees the security of sensitive information. Overall, automating the analysis of annual financial statements offers a forward-looking opportunity for companies to optimize their analysis processes and strengthen their competitiveness.

Contact our experts and explore together the opportunities that Konfuzio can open up for your company. We look forward to hearing from you:

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