Three ways to automate your accounting
There are currently three ways to automate the accounts, and in this blog post we will look at these different solutions, namely OCR, RPA and AI.
Do you need a little recap on these terms and what sets them apart? Do not despair, here is your review.
1) OCR technology: Optical Character Recognition
OCR technology is something most people in the accounting industry are familiar with already, and at 24SevenOffice we have been using this for over 15 years. In short, OCR gives us the opportunity to set a basic setting for how a simple supplier invoice should be posted.
OCR thus works very well as a tool for recognizing parts of the invoice, and the technology is built up via rules. This means that the system has been told to look for the organization number within a given area, or the amount within another area on the invoice.
The OCR reader can manage to remember the last cost account a supplier invoice is to be posted to, and other fixed sets of rules related to the information that is retrieved. But when it comes to differentiating between different VAT rates on an invoice, the OCR can struggle a bit.
It is never a rule without exception, and that is exactly what can be the challenge with OCR. In short: If an invoice changes layout, then the interpretation will no longer work.
2) RPA: Robot Process Automation
RPA is the next step in the direction of automation, and is a tool designed specifically to automate accounting processes. RPA is a form of advanced rule management with a programmable robot, which performs many of the routine tasks that a human does manually today. RPA requires a lot of maintenance to make the automation work, and therefore there are also limits to how far this technology can take us.
At 24sevenOffice we have been in many dialogues with large accounting firms that are leaders in automation with RPA. With a lot of manual work, maintenance and tuning of the set of rules, you often stagnate here around a degree of automation of 60%.
3) AI: Artificial intelligence
The way the AI engine automates is completely different from OCR and RPA. The best AI engines learn and train on historical data, and continuously learn from human corrections and confirmations. We are talking about experiential learning – almost in the same way as a human being – it processes and interprets information continuously.
Accounting with AI is briefly explained an automation of the traditional process related to document management, approval and bookkeeping. Using an AI engine, all incoming invoices can be interpreted automatically and sent for approval with completed accounting proposals, ready for payment. The technology provides particularly large gains and time savings for larger companies with a large invoice volume.
The benefits of AI are many; you can get an automatic invoice flow, deep insight into large amounts of data, always access to correct real-time accounting, very good forecasts and analysis options, and last but not least a solid time saving in everyday life.
When it comes to good AI engines, the degree of automation is as high as 90%! The big difference between AI and OCR and RPA is that the AI engine learns continuously, and therefore becomes increasingly smarter and more ‘on point’.
Do you want an effective review of how AI can help you save time on accounting? Get in contact with us and see the AI in action.