How to separate real value from the noise as you plan for 2026.
As another business year draws to a close, many SME owners and leadership teams are taking stock. What worked well? What fell short? And most importantly, how can they position their organisations for a stronger 2026?
One topic dominating those conversations is artificial intelligence. AI is everywhere, in conference agendas, software demonstrations and strategic plans. It is being presented as the next great leap forward for finance functions, promising faster reporting, predictive forecasting, automated bookkeeping, and deeper insights. But as with any major shift, it is worth stepping back at this point in the year to cut through the hype and consider what really matters.
There is no doubt that AI can reshape how finance teams operate. We have already seen it automate repetitive tasks such as invoice processing, expense categorisation and elements of cashflow forecasting. It can now scan large volumes of data in seconds, flag anomalies before they become issues and even draft board reports or commentary with impressive accuracy. All of this creates an opportunity to release finance teams from routine tasks so they can focus on higher-value work such as analysis, decision support and strategic planning.
However, history offers a valuable lesson as we look ahead. The late 1990s brought a similar wave of enthusiasm with the rise of the internet. Many businesses felt compelled to go online without a clear purpose, driven by optimism and investor pressure. Some thrived, but many failed. The companies that endured were those that used technology to solve real problems rather than chasing the latest trend.
The parallels with AI today are clear. Tools are evolving quickly, investors are flooding in, and “AI-powered” is now a standard label on most new software. Yet many SMEs still do not fully understand what AI can, and crucially cannot, deliver. That gap between expectation and reality is where costly mistakes are made.
Where AI can add real value
Efficiency: Automating repetitive finance tasks saves time, reduces errors, and lowers costs. For small teams, this can transform capacity.
Better decision-making: AI analyses patterns and forecasts outcomes far faster than humans, providing better information for board-level decisions.
Stronger controls: Continuous monitoring and anomaly detection help identify fraud, errors, or compliance issues earlier.
Scalability: As businesses grow, AI can scale with them, reducing the need for proportional increases in headcount.
Where caution is still needed
Hype versus reality: Some tools overpromise and underdeliver, especially if data quality is poor or outputs are not properly understood.
Black box decision-making: AI can produce results without explaining why. In finance, where auditability and accountability matter, this can create risk.
Cost and complexity: Effective AI solutions require investment, planning and governance. They are not quick fixes.
Over-reliance: AI is a tool, not a replacement for human judgement. Strategic decisions still need context and experience.
Lessons learnt and the path ahead
The most important takeaway is that AI adoption is not about technology for its own sake. Just as with the dot-com era, success belongs to those who deploy it with purpose. The smartest SMEs are the ones using AI to tackle specific problems, for example automating invoice approvals or improving cashflow forecasting, while building understanding internally and laying strong data foundations.
As we move into 2026, the opportunity is to scale those early wins. This means embedding governance frameworks, improving data quality, training teams to interpret AI outputs and integrating new tools into wider business strategy. Above all, it means keeping people at the centre. The technology is powerful, but it is finance leaders, those who ask the right questions and provide commercial context, who will ultimately drive better decisions.
The dot-com bubble eventually burst, but the internet reshaped how we do business. AI will follow a similar trajectory. The question for SME leaders in 2026 is not whether to adopt it, but how to use it intelligently. Those who strike the right balance between automation and insight will build finance functions that are faster, smarter, and far more valuable to the businesses they support.
About L4 Financial
L4 Financial works with SME owners, boards and leadership teams as a trusted part-time Finance Director and strategic adviser. I help businesses build finance functions that support growth, improve decision-making, and align financial strategy with commercial goals.
If you would like to explore how I could help you, please get in touch.
E: Mark@L4Financial.co.uk
W: L4Financial.co.uk | T: 07960 031554