Why finance says no
Most AI proposals reach the finance director as a description of a capability. “Software that reads incoming orders and keys them into the system.” “AI that drafts replies to customer queries.” The person proposing it is interested in what the software can do. The finance director is trying to work out what it does to next year’s cash, and the proposal does not say.
A CFO approves cash flows with dates. Money out, on which dates. Money back, on which dates. What happens if the second part does not arrive. Capabilities are not cash flows, so the proposal gets a polite “let’s revisit this next quarter”, which is what “no” sounds like in a board meeting.
The remedy is not a better description of the software. It is to write the case in the same shape finance already uses to approve a vehicle, a new hire or a lease. Six lines. If every line carries a figure with a method behind it, the meeting is short.
The six lines of the case
Line one: one-off cost
Everything spent before the software does its first day of real work. Build or licence fees. The time your own people spend describing the process, supplying examples and testing the result. Any clean-up of records before they can be used. Training for the people who will work alongside it. Include your own staff time at loaded cost, because finance will. A vendor quote that covers only the vendor’s fee is a partial figure.
Line two: monthly run cost
What it costs each month to keep working. This is the line proposers most often leave blank or bundle into a single figure, and the line a CFO trusts least. It gets its own section below.
Line three: the work replaced
The yearly cost of the process as it runs today, with the method shown. Do not estimate this from memory. Use the worksheet in The Cost of a Process: monthly volume, timed minutes per item, loaded hourly cost, sampled error rate and the cost of fixing errors, plus the review and interruption time that first attempts usually miss.
Then state what share of that work the software actually takes on. It rarely takes all of it, because some items will always stop and ask a person. The saving is the cost of the items it completes, less the cost of the items it hands back, less the time a person spends on the handing back. Anything else is the whole process cost dressed up as a saving, and a CFO will spot it.
Line four: payback period
The month in which cumulative saving passes cumulative spend. Take the one-off cost, divide it by the monthly saving after run cost, and add the months of build before any saving begins. State the result as a month on the calendar, not as a ratio or a multiple. A finance director can compare “pays back in a named month” against every other use of the same cash. They cannot compare “strong return”.
Line five: the risk register
What can go wrong, how likely it is, what it costs if it happens, and what stops it. For automated work on a business process, the register tends to carry the same entries: the software does the wrong thing confidently; it handles information it should not; the provider changes its prices or its terms; the person who understood the arrangement leaves; the process it replaced changes underneath it. Each entry gets a control and an owner. The control for “wrong thing confidently” is the written rule for when the software stops and asks a person. That rule belongs in the case itself, not in an appendix.
Line six: the exit or rollback
How you stop. If the software is switched off on a Tuesday, who does the work on Wednesday, and for how long can they keep doing it? What records come back to you, in what form, and how quickly? What notice does the provider require, and what is still owed after notice is given? A case with no exit reads to finance as a case with unlimited downside, and finance is right to read it that way.
Run cost in detail
Run cost has three parts. A proposal should show all three separately, with the assumption behind each.
Usage-based charges from the AI provider
The companies that supply the underlying AI price it by usage: by the amount of text processed, per document, or per request. Vendors who build on those providers sometimes present one bundled monthly figure that mixes provider usage with their own margin. Ask for the split.
Specifically, ask for two things. The provider’s published rate card, which is public and which the vendor did not set. And the vendor’s estimate of your monthly usage against it, with the assumptions written down: how many items a month, how much text each one carries, how many passes the software makes over each. Multiply the two yourself. A vendor who will not show the published rate is asking you to trust a markup you cannot see. A vendor who shows it has handed you a figure you can check against the provider’s own bill after the first month.
Ask two follow-ups. What happens to the figure if your volume doubles? And who carries the difference if the provider raises its prices? The second answer belongs in the risk register as well as here.
The systems it touches
The software reads from and writes to systems you already pay for: the accounting package, the order system, the shared inbox, the customer database. Some of those charge for an additional user, or for automated access, or require a higher tier before they allow it. Your existing licences may cover this or may not. The question usually takes one phone call to answer, and the answer belongs in the case rather than arriving as a surprise on an invoice.
The review time a person still spends
Somebody checks the output. Somebody handles the items the software stops on. Somebody answers the phone when it gets something wrong. This is a real cost at loaded rate and belongs on the run-cost line, not netted quietly against the saving. A case that shows review time honestly is more credible than one claiming none, because the CFO knows that no process has ever run without review.
The CFO’s twelve questions
Each question comes with the answer that should end the meeting. If a question has no answer, the case is not ready to be presented.
- What does it cost to build, all in? One figure that includes our own staff time at loaded cost, record clean-up and testing. Not the vendor’s fee alone.
- What does it cost each month to run? Three figures shown separately: provider usage against the published rate, charges from the systems it touches, and review time at loaded cost. Each with its assumption stated.
- What work does it replace, and how do we know? The yearly cost of the process from a timed and sampled worksheet, with the method attached, not a figure from memory.
- What share of that work still needs a person? A stated share, measured on a sample of real items. The saving counts only the remainder.
- When does it pay back? A calendar month. If the answer is “it depends”, the case is not finished.
- What does it do when it is unsure? It stops and asks a named person, under a written rule that the owner has signed. If there is no rule, there is no case.
- What happens when it is confidently wrong? The register names the outcome, the cost, and the control that catches it before a customer does.
- What information does it see, and where does that information go? A list of the records, the systems they live in, and confirmation of who can see them, including the provider.
- Who owns it inside the business? A named person with the authority to switch it off without asking anyone.
- How do we stop, and what does stopping cost? The exit line: who does the work the day after, what comes back, and what notice is owed.
- What changes if the provider doubles its price? The run-cost line recalculated on that assumption, and the payback month it produces.
- How will we know whether it worked, and by when? A date, and the same worksheet re-run on measured volume, minutes and error rate against the baseline on line three.
Four answers should end the meeting without approval, whatever else is in the case. No payback period. No rule for when the software stops and asks a person. No rollback. A saving with no method behind it. Any one of those, and the finance director is right to decline.
A one-page template for the board
The whole case fits on one side. Supporting detail goes in an appendix.
| Line | What goes here | Method or evidence |
|---|---|---|
| The process | One sentence on the recurring work removed and who does it today | Named owner |
| One-off cost | Build, licence, own staff time, record clean-up, testing | Quotes plus internal time at loaded cost |
| Monthly run cost | Provider usage, system charges, review time, each shown separately | Published rate × estimated usage; loaded hourly cost |
| Work replaced | Yearly cost today, and the share the software completes | Timed and sampled worksheet |
| Payback | A calendar month | One-off ÷ (monthly saving less run cost), plus build months |
| Risk register | Entries with a control and an owner each, the stop-and-ask rule first | Owner’s signature on the rule |
| Exit | Who does the work the day after, what comes back, notice owed | Contract terms in hand |
| Decision requested | Approve, approve with conditions, or defer to a named date | Board minute |
When the case does not clear the bar
Some cases will not. The payback month is too far out. Review time eats most of the saving. Or the timed worksheet reveals that the process is wrong in ways the software would faithfully reproduce at speed. Two honest responses.
Fix the process first. If the worksheet shows that most of the minutes per item go into finding information that should already sit in one place, the cheaper fix is to put it in one place. Automating a broken process buys a faster broken process, and the run cost recurs monthly while the underlying fault stays. Say this to the board as a sequence rather than a rejection: the process needs one change before automation pays back; here is the change and what it costs; we re-run the case once it is made.
Wait. Provider prices move. Volume grows. “Wait” is a different answer from “no”, and it should be presented differently. Set a condition and a date: if monthly volume passes a stated figure, or the provider’s rate falls to a stated level, the payback month moves to within the board’s limit, and the case returns on that date for a decision.
How you say it matters. A deferral written on the same one-page template, with the condition named and a return date in the decision line, keeps the initiative alive without spending money it has not yet earned. A flat “not now” kills it, and the process it would have removed carries on costing what it costs.
A CFO who declines a case with blank lines is not being obstructive. They are asking for the same six lines they would ask for before buying a van. Give them the lines, with the method behind each, and let the arithmetic make the argument.