Every company has a different way of organizing its general ledger into a chart of accounts. And every company has a different grasp of how to classify their costs in their various general ledger accounts.
A quality AI platform for accounting can understand incoming costs and code those costs directly to the proper general ledger account(s). With these capabilities, AI is a huge time saver and even improves accuracy (yes, we humans make mistakes).
The following is an excerpt from “How to Select the Right AI Platform for Accounting: A Buyer’s Guide and Comparison Worksheet.”
AI’s confidence in its predictions is a major technological breakthrough. When AI can determine what the information on a document is and categorize that information based on its machine learning algorithms, you’re saving time, resources, and you’re cutting costs.
Algorithms and Volume of Data
Two factors impact how well an AI platform designed for accounting classifies costs:
1. Its algorithms and the sophistication of its technology
2. The amount of data used for training the technology
For an AI platform to perform exceptionally well, it has to have processed tens of millions of transactions to have a high level of certainty and prediction rate. Very few platforms reach that level since they either need to have a lot of clients or access to massive datasets.
Local General Ledger Accounts Unique for Each Client
General ledger accounts, departments, projects, and other dimensions, are unique to each client.
As a result, accountants have to switch between different buckets of institutional knowledge with every client they see, every day. This routine taxes cognitive abilities and can cause boredom, fatigue, and consequently, a lack of focus, which can lead to costly errors. It also limits who can step in and perform accounting work on each client.
AI can prevent these problems because well-trained AI knows everything there is to know about a client (even going back several years, if applicable). AI can cut down on data retrieval fatigue and related human input errors by as much as 90%.
Is your accounting firm looking to improve accuracy with AI? Share your thoughts in the section for comments below.
To learn more about selecting the right AI platform for accounting that works for you, download your copy of “How to Select the Right AI Platform for Accounting: A Buyer’s Guide and Comparison Worksheet.”