Let’s be clear: AI is not going to build your 2026 budget. It won’t replace the strategic judgment, coordination, and leadership required to set direction for a company. But used correctly, AI can be a powerful assistant for everyone involved. A sharp, pedantic teacher who keeps people honest. Used correctly, it will immediately empower your weakest budgeters and make it easier for your FP&A team to zoom into the details.
The problem is most AI implementations flop. MIT says 95%. So, in all probability your company has had an AI miss. That is often because of poor expectations, rollouts, or communication. But AI is already providing real value, and this budget process is the perfect way to reset the expectations. Success will come from starting small, setting clear expectations, and implementing a tool that can actually reduce pain.
Think of AI in budgeting as an extremely patient extra hand. If you want to go into the details, I would start with our focused AI guide on extracting the most as a CFO now.
For your 2026 budget process, here is where AI can be genuinely useful in budgeting today for all levels in:
Data cleaning, validation and error checking. Spot mismatches, formula breaks, or inputs that don’t align and fix them.
Providing historical insights. Quickly summarizing last year’s performance and surfacing trends.
Creating narrative support. Drafting clean explanations for each department's assumptions, variances, or board materials.
Exploring scenarios. Producing quick “what if” views to help guide discussion.
And, the key things you can do to enable its success are to:
Set realistic expectations. AI is here to assist, not to replace judgment.
Show quick wins. Start with small use cases and error checks, summaries, or scenario drafts that save real time.
If you do it right, the budgeting process becomes the perfect entry point for AI adoption: a controlled, visible, and high-impact use case.
All of these techniques can be done with varying levels by:
Using Excel/Google’s built-in functions
Importing into a large context LLM
Setting up a basic agent on a data warehouse,
Using a next-generation FP&A tool
The tool is up to you, but the basics are the same.
The Bullets
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Let’s get to work.
1. Get help with data checking
A budget has a lot of lines. And often, the most frustrating part of budgeting isn’t the big strategic assumptions. It’s the messy details. Department heads get stuck on endless debates about why one expense is sitting in the wrong category or why someone else’s charge landed in their budget. This wastes hours. Use AI as a budget spell-checker to find and fix:
General expense categorization. Feed in your detailed G/L and let AI flag misclassified expenses. If 95% of similar transactions are in “Office Supplies,” and a handful show up in “Printing,” AI can flag the inconsistency and suggest fixes.
Department-level outliers. Load expenses by department and let AI highlight anomalies like unusually large travel expenses in one quarter, or costs that don’t match the department’s normal spend.
Reversals and duplicates. With advanced setups, AI can spot reversal entries or duplicate transactions and tag them for exclusion. This prevents wasted time reviewing noise when analyzing expenses.
Comment and context improvements. AI can strengthen or expand comments on expenses. For example, if someone just wrote “equipment,” AI can enhance it based on the department, size of expense, or other likely expenses.
Cross-check against policies. AI can automatically flag expenses that violate company rules (e.g., meals above per diem, travel outside of policy vendors).
It won’t catch everything. But it's quick and can catch a lot. So give it a try.
Tip: Most automated checks only need 4–5 dimensions (e.g., amount, department, account, date, description) to run on.
2. Generate insights for everyone
Pulling together how each department performed last year versus budget takes a while. Department heads often forget the story. AI is great here if you unleash it within each department to:
Generate quick summaries. Give each department a simple narrative on how they did last year. It helps orient them before they dive in.
Highlight budget vs. actuals. People forget what they thought would happen. AI can call out what went right or wrong, so they adjust faster this year.
Add improvement tips. Even if some of the advice is standard (focus on drivers, manage spend), having it tied to last year’s numbers makes it feel relevant.
Prepare budget assumptions. Implemented well, it can help walk each budget owner through the key assumptions they need to make for next year.
Tie to company strategy. AI can connect results to bigger shifts, new products, markets, or priorities, so budget owners can ask how strategy impacts their budgets and get informed insights
LLMs are strong at compressing data into clear insights. Give people the story upfront so they can budget with confidence.
Tip: If you can, let department heads chat with their budget. Your most AI-savvy team members will probably already be uploading into ChatGPT to help.
3. Create automated narratives for the budget
Once people start filling in numbers, you can use AI to help them explain what they’re assuming going forward. Numbers on their own can hide a lot; turning them into a narrative makes assumptions clear and easier to challenge. In particular, a department-level AI can help:
Draft a budget narrative. AI can generate a plain-language summary of a department’s budget so leaders can confirm whether it actually makes sense.
Highlight risks. Call out where assumptions look tight, unrealistic, or deviate from prior budgets.
Spot inconsistencies. Once multiple budgets are submitted, AI can compare them and surface where one team’s assumptions don’t align with the rest.
Cross-reference dependencies. AI can summarize what other departments are planning—so teams see whether expectations are realistic or if there are gaps.
Converting numbers into a narrative is one of the best fact-checks you can do. It makes blind spots obvious and surfaces issues before they become problems. And of course, this is just a first check before your FP&A team reviews in detail.
Tip: Build a section in the budget that asks explicitly: “What do you need from other departments?” Even without AI, this cross-check saves time and reduces surprises later.
4. Allow each department to run their own scenarios
If you’ve set things up right, AI can help teams create quick scenarios by just asking. This is where it gets powerful, as budget owners can stress-test their own assumptions in real time. Some examples:
Compensation changes. “What happens if salaries need to rise 7-15% to retain top talent?”
Revenue shifts. “What happens if my average deal size drops 10% but win rates go up?”
Cost changes. “What if shipping costs rise 10-20% next quarter?”
Project trade-offs. “How much will I save if I delay all my hires by a couple of months?”
Attrition impacts. “How many people should I expect to lose this year, and what does that do to my hiring plan?”
Remote vs. office mix: “If 30% more people stay remote, what does that do to office costs and travel budgets?”
Customer churn risk: “What if churn increases by 3% due to pricing changes?”
The real value here is speed. Instead of endless back-and-forth with finance, department heads can explore scenarios themselves and come back with sharper questions and better-prepared budgets.
Tip: Define a small set of core drivers (like headcount, pricing, demand, and costs) that AI can vary. This keeps scenarios meaningful, comparable, and focused on the levers that actually move the business.
5. For success, ensure you properly communicate the tool
How you roll out AI matters as much as how you use it. The goal is to position it as a practical helper, not a magic solution. Here’s how to frame it:
Position it as a helper. Emphasize that AI is great at summarizing, data checking, and generating quick insights, but make it clear that decisions still belong to people.
Set realistic expectations. Don’t oversell it. Be clear that AI won’t be perfect, but it will speed things up and provide more context for better decisions.
Highlight the benefits. Show how it saves time and reduces reliance on FP&A for every small question. It’s about empowerment, not replacement.
Use concrete examples. Share examples of AI summarizing last year’s budget, surfacing anomalies, or generating quick scenarios. Give department heads prompts to try themselves.
If you set the right expectations, people are far more likely to adopt it, and even get excited about it.
Tip: Make your FP&A team the super-users. Have them run trials, learn the strengths and weaknesses, and then act as internal coaches.
6. And, show quick wins
AI adoption lives or dies on early success. If people see it working for them, they’ll lean in. If they don’t, they’ll dismiss it as another overhyped tool. That’s why you need a simple process to capture and share quick wins. We go into detail here, but as a quick overview:
Keep a running list of wins. Track every example where AI saved time, caught an error, or provided useful insight.
Keep a list of misses too. Transparency builds trust. If AI gets something wrong, document it so people know the limitations.
Share updates regularly. Send quick emails or updates highlighting real use cases as they happen.
Demo with real data. Nothing beats showing someone how AI can improve their budget process using their own numbers.
Success breeds success. The more you highlight wins and show people exactly how AI helps, the faster the excitement spreads.
Tip: Appoint one person on your team as an AI lead. Have them help show other team members how.
In conclusion
AI won’t do your budget for you, but it can make the process faster, cleaner, and more effective. Used well, it acts like a sharp assistant. The key is managing expectations: present AI as a helper, highlight early wins, and train your FP&A team as super-users to guide others. With the right setup, AI turns budgeting from a painful process into a more confident, informed, and collaborative one.
