Xero has made another move to bring machine learning and artificial intelligence to its cloud-based small business accounting software, adding functionality to its ‘bills’ feature that will recommend what account codes a business should use.
Xero says bills is the second-most commonly used feature of Xero, but has the second-highest rate of defaults, with every small business using the system differently.
“Fifty percent of businesses use 10 or more expense codes, while others create their own codes, which means that information is often entered incorrectly,” Xero says.
“Xero’s new artificial intelligence system will consider each individual business’s characteristics, then recommend account codes based on what it has learned.”
Addition of the new feature follows Xero’s introduction of functionality in March that aims to ‘guess’ the correct account code for an invoice, and assign that code to it.
Xero said at the time “By the fourth invoice, early machine learning implementations are accurate over 80 percent of the time and by the 50th they consistently reach over 90 percent.”
Xero says the new account code allocation feature is being rolled out to all Xero users, and customers should continue to code their bill as normal. “A minimum of 150 bills is required to be entered and as more bills are entered and accepted or corrected, the better the suggestions become,” the company said.
Xero’s head of data science and automation, Andy Neale, said: “Account coding has the potential to impact both small business finances and reporting. So, when applying machine learning to Xero’s billing system, we needed to ensure accuracy was at the forefront of any changes we were making. While we’ll only know the true impact of the technology when people start using it, on average, we know we can achieve more than 75 percent accuracy after 150 bills have been entered."
The company claims that, with more than 500,000 bills being entered into Xero every day, and with each line of a bill edited individually, the new feature will “transform accounting practices, ensuring greater accuracy and reducing the time small businesses spend creating bills.”