02921 303 888 / 01172 033 200
Request a call back

“When you say artificial intelligence, people think of Terminator. Of Robots” said Gary Turner, the UK’s managing director of Xero at last week’s roadshow.

Here at EST, we have a lot of clients to whom technology and software is at the heart of their business. However, even if that isn’t the case for you, I’m sure you’ve seen the disruption that technology is having on various industries right now. We all know that Uber is the largest taxi company but owns no taxis and that Airbnb is the largest accommodation provider but owns no hotels and so on.

But how does that relate to you and how you manage your business’ financial information?

Well it was only around ten short years ago that the bank reconciliation was a hand-written job undertaken by your accountant or bookkeeper on an A3 pad. Now you do this job yourself, on your mobile phone, with transactions which are automatically pushed into the software by your bank.

And it was only in 2010 that Michael Wood bought a company called Receipt Farm and decided that there must be an easier way to record your business expenses. The same year that a software engineer called Vaughan Rowsell decided to prove that you could have a POS system entirely in the cloud. Six years on and seeing someone take a photo of an expense using the Receipt Bank app on their mobile phone or a shop using Vend installed on an iPad which is being used as a till, isn’t perceived as science fiction but instead pretty much the norm.

With our industry changing at a rapid rate, it was interesting to hear at the Xero roadshow how artificial intelligence will be the next stage in automating your bookkeeping.

How often have you sat down to do your bookkeeping and come across an expense such as website hosting and not known where to categorise it? Is it I.T and Software as your website is an I.T. type thing after all? Or is it Advertising as your website is an integral part of your marketing? Or is it Telephone and Internet as it is the hosting bit that we’re talking about so that’s a little bit internety?

If this is you, then don’t worry. Xero informs us that accountants recode over 3 million items in Xero every single month!

However, the fact that Xero can tell us how many items are recoded shows the level of data that they have available. It’s this data that they want to use to help you out even further. Xero knows that BT is a telephone expense because thousands of businesses code it as such every single day. The same can be said for many more expenses. So why should you have to tell Xero that BT is a telephone expense when it already knows?

That is where artificial intelligence will come in, as Xero plans on using this knowledge to remove the chart of accounts. This means that you will only have to enter that the expense was £50 to B&Q on 1 November 2016. Xero will know that this is more likely than not to be a Repairs and Renewal and automatically code it for you.

So all you need to do is enter the date, amount and supplier and Xero will do the rest. Just imagine how much time and hassle will that save you.

However, you may be thinking that this is great. With this artificial intelligence coding your bank reconciliation for you there will no longer be a need for a bookkeeper or even for your accountant. Let the robots do it.

In fact, Xero did a survey that found that 59% of business owners thought that they wouldn’t need an accountant by 2026. This may surprise you, but we agree. But just like Uber still needs taxi’s and taxi drivers and Airbnb still needs hotels, there will always be a need for accountants, but it’s true that our role and our place in the market is changing considerably. Instead of dealing with paper, we now deal with data.

But that’s a good thing because it means we can spend more time assisting and offering advice. It’s why at EST we have invested in a HR department and a commercial finance department. We are here to help you with as much as we can. And we promise to never charge you extra so we can hand write your bank reconciliation.