Understand the differences between static and dynamic approaches in accounting automation
This article aims to provide clarity on the differences between QuickBooks' rules-based system and Botkeeper's machine learning algorithms. As both are significant technologies in the field of accounting automation, understanding their distinct characteristics can help accountants choose the tools that best fit their needs.
The Nature of Static Rules in QuickBooks
Stable and Consistent
QuickBooks' rules are predefined and remain consistent, which is helpful for repetitive transactions that are unlikely to change.
Manual Customization
If your business conditions change, you have the option to manually adjust these rules. Accountants often modify them to adapt to new transactional behaviors.
Automated Suggestions
QuickBooks offers automated suggestions for transaction categorization, which users can manually approve or adjust based on their preferences.
The Dynamic Machine Learning in Botkeeper
Adaptive and Evolving
Botkeeper's machine learning algorithms are designed to adapt and change dynamically based on incoming transactional data.
Automated Adjustments
The system is capable of automatically fine-tuning its algorithms, significantly reducing the need for manual intervention.
Real-Time Adaptability
Botkeeper's algorithms evolve in real time, adjusting to new vendors, invoice formats, and other changes in business transactions without manual input.
Real-World Scenario
Consider a situation where your client travels and all purchases for Southwest have been applied to the Airfare account in the general ledger. After a long week your client boards the plane to go home and decides they want to purchase a libation and extra leg room. Although these purchases for Southwest they are not technically for airfare, but are rather a Meals & Entertainment expense. In this situation, a human would need to make sure the rules account for various types of Southwest expenses to help the general ledger post them to the correct account. While Botkeeper’s dynamic system would recognize and adapt to it autonomously.
Key Points to Remember
Both QuickBooks' rules and Botkeeper's machine learning offer valuable features for accounting automation:
- QuickBooks offers manually, adjustable rules that requires critical thinking and humans oversight to ensure it doesn’t inadvertently miscategorize transactions
- Botkeeper offers dynamic, self-adjusting machine learning models that continuously learn with every passing transaction that flows through your client’s general ledger