How Machine Learning in Accounting Is Changing the Field – for the Better

Machine learning in accounting sounds crazy. After all, how can a machine perform accounting functions? Accountants must exercise creative problem-solving and make skilled judgment calls every day. A machine can’t do that … or can it?

Machine Learning in Accounting Uses Data to Draw Inferences

Machine learning in accounting isn’t as crazy as it sounds. Machine learning simply means a computerized system analyzes massive amounts of data and draws inferences and patterns from the data. From these inferences and patterns, the system can then anticipate future work.

Think about your favorite book review or movie review websites. Most of them have a feature that suggests “you may like…” picks based on your past reading or viewing habits. This is a great example of machine leaning in action. The computer uses data derived from reviewing your choices and compares it to the choices of hundreds or thousands of people who also read the book or watched the same movie as you did. Then, it uses this data to view patterns and draw inferences on what you might like that’s similar to it. It can be wrong, especially if you have quirky taste, but it’s usually right, and often the suggested picks are spot-on. That’s the power of machine learning.

Benefits of Machine Learning in Accounting Software

It’s one thing to suggest you might like Star Trek if you’ve watched Star Wars, but how does machine learning work in the accounting field? Many accounting tasks are both repetitive and predictable. Categorizing transactions, for example, is a repetitive task. The system can quickly and easily learn the patterns of tasks and categories based upon the most commonly used ones in the system.

In an accounting office, one area in which machine learning is common is in the form fields in accounting software. By recognizing that every time you type Exx in the field you mean Exxon, and you’re entering an expense item (gasoline for company owned vehicles), the system enters the information in the correct field and category. It saves you the additional keystrokes and clicks of manually typing the information into a spreadsheet.

Other Machine Learning Benefits

Areas in which machine learning in accounting offers many benefits includes:

  • Automating invoicing: invoices can be scheduled to email out to clients or customers at regular intervals. If you always invoice clients at Net 30, for example, the system “learns” that you send invoices and may prompt you to send them or send them on your behalf if you set it up that way
  • Simplify audits: a system that incorporates the use of paperless documents (DocLink from Altec) offers an additional way to streamline and simplify audits. Paperwork can be categorized and sorted with needs anticipated by the system.
  • Notify accountants of errors: errors can be flagged by the system for an accountant’s review. If the system knows that the usual range is X and it comes up Y or Z, it can bring it to your attention.
  • Answer questions: chatbots offer a quick way to find information or answer questions

Machine learning will never replace a skilled accountant, but it can save considerable time and effort. By anticipating information in form fields, for example, it saves keystrokes. While saving a keystroke here or there may not seem like a big deal, over time it adds up. For accountants who work in small companies or act as the sole bookkeeper for a company, anything that saves time and effort is a valuable addition to their day. Accounting software that incorporate machines learning is a big plus.

For more information about accounting software and technology, contact Emerald TC: 678-456-6919. We are authorized resellers of Sage and Acumatica technology, both excellent accounting and ERP packages that incorporate machine learning.

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