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Small business owners: Is Artificial Intelligence a risk or opportunity?

19/02/2019 by Pascoe Partners Accountants

Small business owners: Is Artificial Intelligence a risk or opportunity?

 

Artificial Intelligence (AI) seems to be a bit of a buzz phrase for business owners and employees at the moment.

People are concerned about artificial intelligence in business and whether robots will soon be taking over their jobs.

Humorous websites are even dedicated to the subject. You can search to see if a robot can do your job (www.willrobotstakemyjob.com). Serious sites also ask similar questions.

For bookkeepers, accountants, and the small businesses they look after, changes have already been seen. The latest and smartest accounting software is evidence of this.

But should AI be seen as a risk or opportunity for small business owners and their employees?

Let’s clear up a few truths and myths…

 

Artificial Intelligence: Is your business already using it?

Artificial intelligence is perhaps better described as ‘machine learning’ and can be harnessed to assist many small businesses.

Despite popular belief, it does not have to come with a huge price tag or require the IBM Watson computer to power it.

In fact, many software programs commonly used by small businesses today are already showing some signs of AI.

Take, for example, the Xero accounting package.

You are currently able to tell Xero to code common transactions. So, if you make a car payment every month, you can tell the software how to treat the first transaction and it will then use those instructions for subsequent payments.

Xero will also suggest what an entry is for, based on how you’ve treated similar entries in the past.

So, if you’re using Xero, you’re already exposed to a form of artificial intelligence.

 

Artificial Intelligence in business accounting: Where’s it heading?

With most payments now being made electronically, smart accounting software will start to know that a payment to Telstra represents a telephone expense and code the transaction automatically.

The role of the bookkeeper will be to verify the suggested coding and to fix any unknown transactions.

We might have to be more careful when making personal payments to utilities (or other similar payments) from a personal account; and we will need to keep business transactions separate from this activity.

The smartest accounting software will be able to automatically allocate 90 percent of transactions. That’s the main aim.

If this level is achieved, it will be a significant timesaver for small business owners or their bookkeepers. This will mean that more time can be spent on running and improving the business operations to make it more successful.

 

How might AI affect loan applications?

The flow of information from applying artificial intelligence in business accounting software is also helpful when applying for loans.

Some accounting software packages can now link directly to the systems used in the banks. All you need to do is give the credit officer ‘read only’ access to your file for your application to be assessed.

For anyone preparing loan applications, cash flow forecasts, etc. under the new banking regime, this can be a significant timesaver.

Indeed, one of the major banks in New Zealand (where a number of these smart software applications originate) is supplying figured software to its rural customers at the bank’s expense!

When was the last time your bank gave you something for nothing?

Obviously, there is a payback for the bank in all this. Using the software makes it easier and quicker for the bank to review how the business is tracking – and this will compensate for the cost of the software.

 

Want to start embracing the future?

We can expect further enhancements in the future, as software coders push the envelope and computers become quicker and more powerful.

Should we be scared of Big Brother and robots taking over the world?

I think not. In fact, there will be some significant advantages for businesses that are prepared to embrace the technology. For those left behind, a robot might take over your job!

To learn more about some of the software features mentioned above, call (08) 9322 3400 and talk to one of our certified consultants.