3 Ways Artificial Intelligence Is Now Integrated Into Accounting Software
We’ve already posted some information about how robots are changing the job environment, particularly in matters of accounting and finance.
We’ve also alerted you to the fact that, at some point in the future, artificial intelligence will beat humans at everything. We’re getting closer to this point every day; but so far, artificial intelligence (AI) is serving to help humans get things done more efficiently rather than totally replacing humans.
Accounting is one field where AI is developing rapidly. Machine learning algorithms are speeding up the accounting process for both accountants and the small business owners who handle their own accounting. Let’s take a look at 3 ways machine learning is being integrated into popular accounting software to save people time in balancing their books.
1. Automated Expense Code Recommendations
Expense codes are a tricky area where accountants and small business owners are prone to making mistakes. Half of all businesses have such varied expenses that they need to use more than 10 different expense codes to categorize and enter them all. Some businesses define their own expense codes. Mistakes are common.
Xero is a useful cloud-based accounting software that is now making use of machine learning to minimize the numbers of expense code errors people will make in the future. How it works: The machine learning algorithm will process information about each business that’s using the software. Based on what it learns, it will then make recommendations about which code is appropriate for each invoice entered.
When both a business owner and an accountant are using the software, the machine learning algorithm is able to learn quickly by analyzing corrections made by the accountant. When an owner makes an incorrect entry and the accountant later fixes it, the software prioritizes the methods used by the accountant. It is then able to make more accurate recommendations based on what it has learned. After the software users have entered about 150 invoices on behalf of the business, the algorithm has typically learned sufficient amounts of information about the business to produce reliable recommendations consistently.
While most clients agree this feature is extremely intuitive to use, there are small business owners who need help understanding expense codes in general. Xero courses can help you learn more about expense codes and how to get the most out of the automation of this feature in the Xero software.
2. Automated Bank Reconciliation
Xero, Cashback and other accounting software providers are now offering time saving automated bank reconciliation features. This is possible because the software is able to interface directly with banks being used by clients. The software searches and matches up transactions using the bank’s records. While human intervention may sometimes still be required in cases where there are numerous mismatches, the automation speeds up the process of bank reconciliation tremendously.
3. Chatbots Provide Automated Answers to Your Questions
Xero and some competing software providers offer chatbots that can help to answer questions you have relating to your account. If you want quick answers to questions such as how much money is currently in your business account or how much revenue is due to be paid to your company this week, the chatbot can either get you an answer or connect you with an advisor who can help.
These are just 3 of the ways that AI is saving businesses time. As machine learning gains sophistication, it will enable businesses to save even more time in the future. There will probably come a time in the not too distant future when AI will be reliable enough to handle all repetitive accounting tasks, freeing business owners and accountants to spend their time on more important work.