AI in accounting systems

AI is transforming accounting systems! From simplifying tasks like bank
reconciliation to generating insights for better decision-making, tools like
Xero’s AI and JAX are enhancing efficiency. The future is here!

My first introduction to Xero using AI was back in 2014 when I saw a suggestion on how I should code bank fees in a client’s Xero file. It was a simple pre-fill of “404 – Bank fees” as the Account and “ANZ” in the Who fields. This was a neat feature as the system was learning to suggest coding for us based on what we’ve coded before rather than relying on us to create bank rules only for automation. This was the dawn of Xero’s AI implementation in their product.

Fast forward 10 years and now, not only does Xero have AI to suggest coding on your bank reconciliation, it also has the capability to make suggestions when you are creating invoices as well as utilising OCR (optical character recognition) on bills you email directly to Bills or Pay or Hubdoc in order to minimise your data entry. More impressively, Xero now also utilises Generative AI (Gen AI) in their help portal where if you ask a question “how do I…do something” it will generate a response with clear instructions on a possible solution to your problem.

Looking at this generated answer, the structure is no different to how we would respond to a client’s question via email.

The next step on Xero’s AI journey is using Gen AI to perform tasks for the end user with a tool called JAX (Just Ask Xero). For advisors, you can use JAX to track down unreconciled items, long overdue debts and other anomalous items in the client’s Xero File. For the business owner, they can utilise JAX to create a quote or invoice to a client whilst they are on the go rather than waiting until they are back at the office. At present, using Text Messages, Whatsapp Messages and emails can be utilised to start the conversation with JAX to create the Quote or Invoice.

In the addon space, AI has also started to make an impact around the interpretation of information and the generation of insights based on the financial information taken from the accounting systems. If we take Syft, a reporting platform, for example, they have embedded their AI tool to generate commentary based on the financial results for a specified period. For example, here is a piece of generated commentary on the monthly Profit or Loss for the year:

With tools like JAX and AI insights making its way into the accounting field, it gives us faster access to meaningful data that we can use to better understand and inform our clients to assist with their decision making. Of course, given that the Generative AI discussed above are both in “Betas,” some level of data validation would need to be done to ensure what has been generated is also what is true. However, what would have taken several hours to collate and analyse can now be done within minutes, potentially removing a cost barrier that may have existed for clients before.

AI is here to stay and to be on top of the competition we need to be ahead of the game by understanding its capabilities and being proactive business advisors. I encourage you all to invest some time learning a little bit about what’s available to us right now then use that knowledge to empower your advisory and services to your clients.