You know how important cloud-based accounting is in your firm and your clients’ businesses. But what about machine learning? How can you harness that technology to help you further streamline your accounting tasks?
Turns out, you don’t have to go far to take advantage of machine learning. In online accounting software platforms like Patriot Software, it’s already here. And machine learning in accounting software is a match made in heaven.
Read on to learn what it is, its impact in the accounting industry, and how Patriot’s Accounting Software uses the technology.
Machine learning: What it is
Machine learning is a type of artificial intelligence (AI). In fact, it’s probably the most popular application of AI. What makes it so special? Machine learning is all about giving data to machines and letting them, well, learn.
According to MIT Technology Review, machine learning systems “use statistics to find patterns in massive amounts of data.” In a nutshell, machine learning is when a system receives data, learns from said data, and makes suggestions based on the information it is given.
Have you ever streamed a TV show or purchased something online and received recommendations (e.g., Because you watched/purchased ABC, you might also like XYZ). That’s machine learning in action. The system is pulling data from what other people who watched the show or purchased the item also watched or bought. If you’ve watched the suggested show or bought the recommended item, the machine learning is working.
Machine learning is used in a number of fields, such as:
- Customer service
There are two types of machine learning: supervised and unsupervised. In supervised learning, the machine is trained with labeled data in the hopes of automatically producing labels for unlabeled data. In unsupervised learning, the machine receives unlabeled data and puts it into groups.
From making recommendations to categorizing accounting data, machine learning can act as a supporting tool to simplify, strengthen, and streamline processes.
Benefits of machine learning
So, when is it a good idea to use machine learning? Here are a few reasons why machine learning can be beneficial in business:
- Simplification of complex tasks
- Time savings
- Better accuracy
Keep in mind that machine learning is not mistake-free. Because it is a machine that is always learning, it won’t be accurate 100% of the time. This is why human interaction (e.g., review) is necessary. But the more data the program receives, the more accurate it can become in its suggestions.
How it’s revolutionizing accounting
Generally, machine learning streamlines the process of organizing large quantities of data. Because of this, machine learning has become a staple in the accounting software industry.
So, how does accounting use machine learning? Accounting software can use machine learning technology to gather information from users and use that information to correctly label and group data—all automatically.
When it comes to accounting, machine learning can help with:
- Invoice simplification
- Accounts payable
- Fraud detection
Using machine learning systems in accounting can streamline the process of categorizing and reconciling accounts, spotting errors, matching data, and identifying security threats.
Worried? Here’s why you shouldn’t be
Automation is coming for a number of accounting responsibilities. But for those of you concerned that it could hinder your career rather than help it, don’t panic.
Again, machine learning is useful in helping to reduce monotonous responsibilities, such as data entry, bookkeeping, and compliance work. It is not a substitute for tasks that require 100% accuracy. And in most cases, the user has to take action to approve or decline suggestions and categorizations.
Taking advantage of tools with machine learning technology can help you save precious time to focus on valuable and unique services, like advising your clients.
Machine learning in Patriot’s Accounting Software
Patriot Software, a leading accounting software and payroll provider, currently uses machine learning in its Accounting products.
Patriot utilizes machine learning technology in its “Patriot Smart Suggestion” feature. “Smart Suggestion” provides automatic expense account suggestions to users, saving them from manually categorizing transactions during bank imports. Users see suggestions based on what other users have commonly selected for similar transactions.
If you use “Smart Suggestion,” the feature will save you from having to manually select each account from a dropdown … which can be a pretty hefty time-saving option, especially if you’re importing up to two years worth of transactions. You will see an atom-like symbol next to transactions categorized with “Smart Suggestion.”
So, how does it work? Patriot’s system uses significant aggregate data to make the suggestions. The software only pulls results with a reasonably high confidence.
When users import bank transactions (either automatically or manually), the software makes an account suggestion for categorizing them based on the same or similar transactions categorized by thousands of users. Then, users must accept or dismiss the suggestion. If it’s the right suggestion for your books, you’re done. If it’s not quite the right one, simply select a different account for that transaction.
With each “acceptance” and “dismissal,” the software continues learning … and getting smarter.
Ready to see what all the hype is about?
Want to see how smart machine learning really is? Accountants can see what all the fuss is about by joining Patriot’s Partner Program.
Here are just a few benefits of partnering with Patriot Software:
- Choose between Accounting Basic and Accounting Premium
- Receive special pricing for your clients
- Get free expert support
- Take advantage of free accounting for your firm (with 6 or more client accounts)
- Free 30-day trial for all new accounts