Published on: February 18, 2020
When you read about accounting technology, you probably don’t think about machine learning. Machine learning, along with artificial intelligence (AI), is the hot trend of the decade, and it’s becoming part of new accounting technology.
When it comes to accounting technology, machine learning adds time-saving functions to the basic systems. Machine learning is a computer’s ability to recognize and apply patterns, conclude algorithms from those patterns, and then refine those algorithms based on feedback. The result, when applied to accounting programs, is a system that recognizes patterns and “thinks ahead” for you.
Accounting systems have come a long way from basic spreadsheets and simple general ledgers. New systems can spot patterns, recognize discrepancies, schedule reminders, and generate expert reports. All of these time-saving features help you use your expertise and insights to read, interpret, and use the information.
A Closer Look at Machine Learning
Machine learning excels at inductive reasoning. If the system has access to data, it can “learn” what the rules are for determining the results. The more information that feeds into the system, the better the ‘learning’ will be, and the more accurate the result.
People are better at making quick, creative decisions; machines can process large amounts of data quickly. This makes machines slightly better at predicting outcomes, especially if they have a continuous supply of data.
You’ve seen machine learning in action on many websites. Netflix, for example, provides suggested movies and television shows based on what you’ve watched previously. It takes your viewing history and looks at everyone else in its database who watched the same movies and then infers what you might enjoy next.
If you’re like most people and have consistent viewing taste, the suggestions will be eerily accurate. If you’re quirky with eclectic taste, you’ll confound the machine – but that’s more likely in creative areas like selecting books, movies, and television. When it comes to things like predicting ordering cycles in manufacturing, machine learning can be very accurate.
Machine Learning and Accounting Technology
Accountants know that much of their work consists of repetitive tasks. Machine learning handles such tasks beautifully. Many accounting systems auto-categorize transactions and track entry errors for reconciliation. Other examples of machine learning within accounting technology include matching items to amounts to simplify invoicing, automating reconciliations and categories, and using chatbots to address financial queries.
Skeptical? Think about it this way. All of the tasks listed above are repetitive tasks. Many small businesses lack a large staff to handle accounting and finance. Machine learning through accounting technology provides additional support by streamlining routine, repetitive tasks. Machine learning makes “DIY accounting” achievable by automating tasks such as categorization and reconciliation, transforming accounting technology into a helpful adjunct to people managing accounting tasks.
One of the great things about AI and machine learning is that the more you use it, the better it gets. It learns from all those repetitions what you want and can anticipate tasks easier. So if at first it seems frustrating, keep going—soon, your system will learn the routine.
Accounting Technology Innovations
Accounting technology continues to mature, adding innovations from other tech areas to the basic accounting systems you’ve gotten to know in the past. To learn more about innovations in accounting technology or to explore new systems for your business, contact Mindover Software. We can help with selection, implementation, and training in your new system. For more information, contact us or call 512-990-3994.