AI to Transform Financial Management for Indian SMEs and MSMEs

All India: Indian SMEs (Small and Medium Enterprises) and MSMEs (Micro, Small, and Medium Enterprises) make up more than 60 million enterprises, contributing to over 30% of the nation’s GDP and employing more than 110 million people. Despite their importance, these businesses often struggle with managing finances, maintaining accurate records, and staying compliant with regulations. Artificial intelligence (AI) is helping address these challenges by providing tools that simplify financial management, enhance compliance, and support the growth of the sector.  

AI-powered financial solutions are enabling SMEs and MSMEs to automate routine tasks, such as bookkeeping, invoice management, and financial forecasting, which previously required significant manual effort. By automating these tasks, businesses can reduce human error by up to 90% and improve accuracy, allowing owners to focus on growth. AI tools can categorize transactions, identify discrepancies, and ensure that all financial entries align with the latest regulations, saving businesses an estimated 20% in time and operational costs.  

“AI is making financial management more accessible for Indian SMEs and MSMEs,” said Mohit Tomar, Head- Credit Control of Embee Software. “With AI, businesses can automate complex financial tasks, access real-time data insights, and ensure compliance with regulatory standards. This helps them maintain a stable financial position, which is critical to their success and the overall health of the Indian economy,”  added Tomar.

AI also offers predictive analytics that helps businesses anticipate market trends, manage cash flow more effectively, and reduce financial risks. By implementing AI-driven tools, SMEs and MSMEs can improve cash flow forecasting by 30% and reduce the risk of financial mismanagement by 40%. These tools not only help individual businesses but also strengthen the sector's contribution to India's GDP, which stands at over $3 trillion.  

As more Indian SMEs and MSMEs adopt AI-driven financial management tools, they are better positioned to expand, compete in global markets, and contribute to India's economic growth. AI’s role in financial management is crucial for ensuring sustainable growth in the sector and fortifying the country’s economic landscape.