What actually is Artificial Intelligence?

What actually is Artificial Intelligence and what does it have to do with accounting?

Are you sure that your business is not heading for bankruptcy? Orders and turnover may be good, but a study from the University of Mannheim has shown that 75% of insolvencies are due to companies lacking of overview of their finances: “A lack of controlling, gaps in financing and inadequate credit management are the principal causes of companies becoming insolvent.”

An impending shortage of liquidity can be identified in good time when financial data is available in real time. However, managers in middle-sized businesses generally first see the financial figures with a delay of days or even weeks.

Intelligent Software as a solution

Our financial management software is based on highly complex technology like Artificial Intelligence. Machine learning contributes greatly to the software’s intelligence. With SMACC’s financial management solution, entrepreneurs from medium-sized businesses can also view their company finances as if they were on the board of a DAX company. In other words: Have access to all desired information regarding company finances anytime on a daily basis.

There are currently four areas of application for Artificial Intelligence (A.I.) in the financial sector that we describe in detail for the first time in our current Whitepaper. Each area of application already offers great added value for accounting in its own right. However, the greatest increase in efficiency is achieved when the three scenarios that are currently already available, build on each other. These are:

Reading and interpreting data from documents

The intelligent software recognizes relevant data in invoices and receipts and processes them largely independently. Booking records are automatically generated. For this scenario, the neural networks technology is applied.

Understanding expert knowledge and learning from it

Intelligent software can manually “understand” entries from experts and automatically undertake tasks for similar procedures with this knowledge – with the help of the expert system technology.

Matching of bank details and invoices

The intelligent software compares account details and invoices with one another to immediately detect possible errors.This makes bank reconciliations more reliable. Learning algorithms are employed here.

In general, the aim in each of these areas is always to generate correct and important (financial) information. Additionally, the input of data should be made as simple as possible.

The fourth area of application is still being developed and will soon use the findings of the other three areas to predict financial developments. It is about:

Forecasts on future business developments

A forecast system works as an early-warning mechanism to recognize positive and negative developments at an early stage and react to them. In addition to internal sources, external sources can also be considered, e.g. the weather report in gastronomy industry. Technology: Predictive analytics.

Artificial Intelligence evidently has all sorts of possibilities in accounting.