Unlocking the Potential of Auto Reconciliation with AI and ML
In this digital age, forward-looking organizations are adopting cutting-edge technologies, such as Artificial Intelligence (AI) and Machine Learning (ML), on a continuous basis. AI, ML, and other technologies, including Auto Reconciliation, are not just trends; they are driving transformative changes. According to Mckinsey’s The State of AI in 2021 report, 56% of businesses are actively working to incorporate AI into various business functions, including finance, operations, marketing, and others.
Understanding AI and ML
As AI and ML are in their infancy stages, people often confuse them as being the same. AI is a technology that uses math and logic to simulate computers to mimic human behavior. In contrast, ML is the application of AI through mathematical models to enable continuous learning and improvement in computers. For instance, Google Assistant is an example of AI and Google’s Search Algorithm is an ML.
AI and ML benefit not only the IT operations of companies but also prove advantageous in all other business operations, including accounting, finance, supply chains, etc.
Why Finance & Accounts Departments Need Automation, AI & ML
One of the most monotonous and tedious tasks in accounting is reconciliations. Traditional reconciliation involves the collection of ledgers manually by the accounts team & reconciliation with the support of excel & spreadsheet formulas. Imagine the following scenario
- Lacs of line items
- Large vendor base also compel to undertake separate GST reconcile, therefore Indirect Tax team also needs to be involved
- TDS applicability for all the transactions can lead to separate reconciliation of TDS receivable or 26AS.
- Payment and/or receipts are being recorded on adhoc basis.
AI and ML can enable the system to process various complex transactions into simple rules, offering customization opportunities within seconds. For example, TDS and GST reconciliations can be simplify by coding computers to learn the method of identification and application of different rates without any human intervention.
AI and ML will not only save employees time and effort but also lower the scope of human errors. According to Accenture’s CFO Reimagined, automation can cover a substantial 60-80% of accounting activities. Moreover, automation will greatly boost data integrity, preventing significant unidentified differences and freeing up employee hours for analysis. AI and ML also offer automated communication, reconciliation, and early loss identification, expediting settlements.
Firmway: Pioneering Auto Reconciliation with AI and ML
Firmway is one such SaaS-based interactive platform that simplifies reconciliations. It automates all the steps involved in reconciliations (communication with third parties, obtaining accounting records, reconciling, and generating summary reports) and strives for minimal human intervention. Businesses are rapidly transforming with technology, but there is still room for improvement, especially in accounting and reconciliations. Anticipating a revolution in the world driven by artificial intelligence and machine learning, Firmway plans to wholeheartedly embrace AI and ML to technologically advance accounting and auditing in the coming years. By effectively utilizing AI and ML, it aims to streamline and expedite reconciliation processes, ultimately saving users time and money. Moreover, it is diligently developing tech-savvy solutions for clients, actively putting innovations to work.
