None of us are born with the innate ability to perform algebraic equations, drive a car, or balance a checkbook. Instead, we’re shown how to do those things, practicing until we get it right. Our brains act as computers, gathering information, processing it, and using it as the basis for further growth.
Artificial intelligence, or AI, is the same. Contrary to popular belief, artificial intelligence software doesn’t automatically know how to do something. It relies on humans to show it how to perform specific tasks, practicing those tasks until perfected. The same is true for AI-powered automated software – human interaction is required to get the application running smoothly.
What is artificial intelligence?
Most people look at AI like a classic science fiction battle: artificial intelligence vs human intelligence – who will win? Instead, it should be framed as artificial intelligence AND human interaction, and how they work together. In reality, AI-powered applications like automated accounting software need to first be trained by humans before we can rely on it to accurately and efficiently automate financial and accounting workflows.
How does artificial intelligence benefit accounting?
AI is used to collect and extract financial data from digital bank feeds and paper receipts, invoices, revenue reports, and bank statements. AI organizes digitized data into efficient financial workflows where you can pay bills, reimburse expenses, track revenue, and store documents.
Guidelines for human-AI interaction
There are only a few guidelines for getting your AI-powered accounting software to perform as promised.
- Accurate data in/accurate data out
Whether you’re using regular or AI-powered software, the quality of the data you put into the system is the quality you’ll get out of it. If you take the time to enter accurate information, you’ll end up with a system that produces accurate month-end and financial statements—anything less results in misinformation and errors.
- Proper integration with source data
AI can’t do its job if you don’t properly integrate the application with your bank accounts, credit card accounts, and other relevant applications.
- Use AI to supplement, not replace your bookkeeper or accountant
There will still be a need for a human to proof the AI’s work. Second, while AI can categorize and reconcile large amounts of data quickly, it cannot interpret financial data. Only you, the business manager or accountant, can draw conclusions from the revenue and expense data in the financial statements.
- Humans must oversee AI
Humans need to train artificial intelligence in the nuances of their businesses. For example, when using AI-powered accounting software like Docyt, the first time the application receives an insurance bill, it relies on you to tell it that it’s an insurance expense and not office supplies or meals and entertainment. When that vendor and transaction type appears again, Docyt will automatically know how to categorize it. And of course, you remain in complete control. If you decide to recategorize an expense, you can make adjustments in the software, and Docyt will re-learn and do it automatically next time.
For more information on Docyt Accounting Automation Software and the handy Docyt mobile and web apps, check out our website or contact Docyt for a free consultation.