What’s all the fuss about AI in accounting then?
Let’s breakdown what it’s all about!
The term Artificial Intelligence or ‘AI’ refers to a set of rules that enables systems to perform tasks that normally require human intelligence. Activities can include speech recognition, decision making and language translation.
You may even have heard terms such as ‘Machine Learning’ and ‘Deep learning’ which are types of AI all based on algorithms and data analysis. This process enables computers to learn and adapt independently to perform the given tasks fast.
So imagine talking to your device and asking it questions about your financial status AND getting accurate answers far quicker than any human can provide, or posting a transaction by telling the device to do so.
All this technology is here with us now and we are using it every day! Half the time without even realising we actually are.
Artificial Intelligence (AI) and associated technologies are growing at an unprecedented pace in this arena. The impact of these technologies is challenging traditional business models and accounting/bookkeeping processes like never before. You can procure a cloud accounting software package for a very small cost each month. To give you more functionality you can then add other software to that will perform specific business tasks, then post financials into your accounting software. This will save you time.
So in basic terms this means that every small business, accountant and bookkeeper now could now have a supercomputer working for them at a very small cost. And it all starts with the cloud!
Cloud technology provides the advantage here because all the raw data of millions of users can be anonymised (so it is not a breach of security in any way shape or form) to create the foundation on which AI and machine learning is built. That data is the key. When you ask the software a question or give it a task it runs machine learning across this data. AI will then present the data or answer required in the relevant format. After time the machine learns these queries and can do the task all by itself.
So technology won’t just collect information – it’ll learn from what it stores. Accounting software is getting smarter, automatically performing analysis which previously required human intervention. Consider tasks like bank reconciliation: systems can learn how to completely automate the job, freeing up your time.
Take this to another level: when you use a chat bot that is designed to integrate with your cloud accounting software you have something quite exciting at your fingertips. The chat bot will make use of machine learning technology and the transactional data processed in the software by simply asking the question in ‘computer speak’ and scanning all data available in nanoseconds. This means you can query your latest financial data, including who owes you money, when their next invoice is due, or how much money is in your business bank account and get immediate answers. Cash flow is often a problem in a small business, so think about how having up to date financial information at your fingertips would be invaluable for your business.
Imagine adding in a virtual PA that could answer questions via a voice conversation to provide information on your business financials or post transactions for you just by being told what to post? Then look at the broader picture of running your business, what about if you use add-ons to your accounting software that perform other tasks like appointment booking or job scheduling?
No need to be alarmed though! This is not an army of robots taking over our world. Machine learning cannot match the human brain. It has no emotional intelligence and cannot think organically nor freely. Artificial Intelligence can, however, complement our brain power. It can do heavy calculations, time consuming reconciliations and the laborious work of verifying information. While AI means computers can learn and apply deep insights, they cannot think like we do and cannot offer emotional intelligence needed to navigate the complexities of the human world.
What are algorithms?
Algorithms (in computing terms, not mathematical terms) are sets of step by step instructions for a computer to follow. They are the heart of all computer programs and they help computers make decisions. Algorithms are designed to solve problems. There are two types, Human-readable instructions are encoded in a language that humans can use and understand, while machine-readable instructions are in a language that computers understand, and are in binary code. Both instructions are actually written by humans.
What are Virtual PAs?
A device we speak to that understands what we are asking and processes our request by accessing vast amounts of data from a variety of sources to build their response. We can ask for a song to be played and it will be, what the weather is like on Saturday it will tell us, what’s in our diary today or in accounting terms, maybe, what is our profit to date? The virtual PA will learn about its user’s requirements so it can be more effective in helping them organise and track information quickly. Eventually they could begin to actually anticipate the user’s needs. Virtual PAs work well when linked to chat bots
What Are Chat Bots?
Chat bots are computer programs designed to simulate conversation with human users, especially over the Internet. They mimic human interaction. You may have used one via a website when you see the ‘chat now’ box come up. It’s not always a human behind your interactions. They are a reasonably new thing in our lives (though they’ve been around for ages behind the scenes) and will become far more prominent in no time at all.
So all this technology is available in the SMB business and accounting sectors?
Artificial Intelligence (AI) and associated technologies are growing at an unprecedented pace in this arena. The disruptive impact of these technologies is challenging the traditional business models and practices like never before. The professions of Accounting and Bookkeeping are no exceptions, quite the opposite in fact. Artificial Intelligence, Machine Learning (ML) and Cloud technologies are all set to improve how accounting and bookkeeping for small and medium businesses have operated over the last couple of decades.