Wednesday, 11 October 2017 10:53

Xero aims to smooth out billing systems with automation

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Accounting software company Xero has launched machine learning automation of account codes and bills, which it says is designed to ensure greater accuracy and reduction in the time small businesses spend creating bills.

The firm claims the launch is the next step towards code-free accounting and, while bills is the second-most commonly used feature of Xero, it has the second-highest rate of defaults, with every small business using the system differently.

According to Xero, 50% of businesses use 10 or more expense codes, while others create their own, which means that information is often entered incorrectly.  

With machine learning Xero says its new artificial intelligence system will consider each individual business’s characteristics, then recommend account codes based on what it has learned.

“We set out to further develop our machine learning program to reduce the number of mistakes being made when creating bills. In doing so, we’ve created a system that not only learns from the individual needs of our customers, but can also make objective decisions about which account their transactions should be coded to,” said Andy Neale, head of data science and automation at Xero.

“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% accuracy after 150 bills have been entered.

“Account codes can be time intensive task for small businesses. We are using machine learning to simplify the system overall, so that more time is spent growing the business, rather than on low-value, administrative tasks.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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