Dave Evans (FreeAgent’s Group Engineering Manager for Analytics and Data Science) takes us through how FreeAgent’s latest release, Smart Capture, uses machine learning to help accountants and their clients automate time-consuming tasks.
In recent years, FreeAgent has been harnessing machine learning’s capabilities to help accountants and their clients automate their admin. In fact, over the last three years, our banking features, powered by machine learning, have helped customers to categorise over 18 million bank transactions.
We’ve now launched a new automation as part of our latest release, Smart Capture, which helps accountants and their clients quickly convert a photo of a receipt to an expense with the date, amount and appropriate category automatically assigned. Not only does this make it easier for clients to keep their accounts up to date, but it also helps reduce errors and lets accounting professionals spend more time providing their clients with higher-value advisory services.
How does it work?
The starting point for building any machine learning system is data. For Smart Capture, we used tens of thousands of historically scanned receipts that had already been converted to expenses as the basis. By identifying relationships between receipt merchants, line items and amounts, we could then train the machine learning model to predict the accounting categories a human would typically choose.
We know some businesses will categorise the same data differently for valid reasons. To account for this, we check a customer’s receipt data against their previous expenses each time they scan a receipt. If they have previously explained a similar receipt, then we use that information to assign a category rather than the machine learning model.
We’ve extensively tested the performance of Smart Capture by verifying that its outputs correspond to how customers categorised their receipts prior to the release. These checks showed us that the categories suggested by the system would be effective in saving accountants and their clients valuable time.
What are the benefits?
Regardless of the size of your practice, Smart Capture lets you benefit from artificial intelligence’s latest capabilities. It’s important to remember, however, that while machine learning can do much of the heavy lifting, trained professionals need to remain accountable for the results and how they’re interpreted.
Automating expense categorisation and digitalising your clients’ data will give you more time to dive into the data and offer higher-value advisory services to clients, and this is where the true power of AI lies.