By Matthew Perry
Xero recently unveiled advancement in machine learning automation that uses statistical analysis to learn how a business categorises its invoices, granting it the ability to automatically sort SME (Small or Medium Enterprise) invoices. This is currently being tested with a small user group of SME’s and means they no longer have to code their invoices.
What does this mean for you as an SME?
What it means is that you could soon see even more time being freed up as common corrections are remembered by the software. Xero’s system saw 80% accuracy after learning from only 4 invoices! This was before they began testing the model with real businesses, outside of a test environment. This advancement functions as an assistant, making suggestions when inputting invoice records.
As improvements are made to cloud accounting software, rates of innovation and company growth will see exponential increases. Businesses will be able to lend more thinking time from number crunching to the innovation and growth that really matters, especially in cases where the SME can rely on their accountant to provide the financial skills and advice they need.
Competitors to Xero and other accounting software providers are also developing solutions that are making desktop accounting methods increasingly redundant. Interest has been publicly raised into how Xero’s automation will work with external add-on software providers, such as Receipt Bank, and Xero have confirmed that this has been taken on board – if they receive enough interest and they have the machine learning algorithm at a high enough standard, they could open the suggestion API’s to developers.
Right now, it is largely the junior level tasks that are being automated. We aren’t at Terminator-level machine dominance in the accountancy industry, although it is becoming increasingly important to ensure accountancy practices are strategic and can help companies with more than simply putting numbers into a system. This is all good news for SME’s as they will begin to see improvements in the quality of advice and technology they receive from their accountants and compliance/financial advisors.