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.
“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.”