Artificial intelligence (AI) is becoming part of many of the programs we use every day – and accounting software is no exception.
Xero has been steadily introducing AI-powered features designed to make bookkeeping faster, reduce repetitive administration and help small business owners better understand their financial position.
At Oculus Accountants in Tweed Heads, we see technology such as Xero as a valuable tool for making the day-to-day financial management of a business simpler.
But what exactly is AI doing inside Xero?
Making Bank Reconciliation Easier
One of the most practical uses of AI in Xero is bank reconciliation.
Xero can analyse transactions coming through your bank feed and suggest how they should be matched or categorised. Its AI technology can consider bank rules, existing transactions and how similar transactions have previously been reconciled.
Depending on your Xero plan, Xero’s AI finance partner, JAX, can also automatically reconcile transactions when it has a high level of confidence that the match is correct. If it isn’t confident, the transaction can be left for you to review.
For a small business processing many transactions each week, this can significantly reduce the amount of repetitive bookkeeping required.
Less Manual Data Entry
AI can also help reduce the time spent entering information from bills and receipts.
Xero’s smart document capture technology can read information from bills and receipts and turn it into digital accounting data. Instead of manually typing information into your accounting system, much of the information can be captured automatically.
This doesn’t mean records should never be checked, but it can make keeping your accounts organised considerably easier.
Ask Questions in Everyday Language
Perhaps one of the most interesting developments is JAX – Xero’s AI finance partner.
Rather than having to understand every accounting report, business owners can ask JAX questions about their finances using normal, everyday language.
For example, you might want to know:
- What was my income over the last six months?
- How has my gross profit changed over the past year?
- What does my current cash flow look like?
- Who still owes my business money?
JAX can use information within Xero to provide easy-to-understand answers and help identify financial trends.
Better Information for Business Decisions
One of the biggest advantages of AI isn’t simply saving time. It’s making financial information easier to understand and use.
When your bookkeeping is kept up to date, you and your accountant have a clearer picture of cash flow, expenses, profitability and the overall financial health of the business.
Importantly, AI doesn’t replace professional accounting advice. Xero itself describes JAX as an AI finance partner rather than a replacement for your accountant.
Combining Technology with Professional Advice
AI will continue to change the way small businesses manage their finances. Used properly, tools such as Xero can reduce administration, improve record keeping and provide quicker access to useful financial information.
However, technology works best when your accounting system is set up correctly and the information going into it is accurate.
At Oculus Accountants in Tweed Heads, we can help small business owners set up and use Xero effectively, understand their financial reports and make the most of the technology available.
Need help getting more from Xero? Talk to the team at Oculus Accountants about making your accounting software work harder for your business.
