INSIGHTS

Can AI Tools Make Your Small Business More Profitable?

Artificial Intelligence (AI) is no longer a futuristic concept reserved for the tech industries or cutting-edge startups. Today, AI is transforming the small business landscape, through tools that enhance efficiency, reduce costs, and ultimately promote profitability.

AI technologies simulate human thought in performing tasks, and include:

Machine learning – patterns in data are recognizable by AI software.
Predictive AI – patterns are learned from data to inform suggestions to human users.
Generative AI – the software uses the learned patterns to create new information.

Recent research in the USA has revealed that nearly half of US-based small businesses have adopted AI tools in the past year, showing that AI will increasingly become an integral part of modern small businesses. We explore what’s driving the shift to AI and how South African small business owners can leverage its value.

The Rise of AI in Small Business

The rapid adoption of AI is being driven by the compelling benefits that AI offers, most notably the range of tools and applications now available helping to boost profitability, productivity, and competitiveness. AI tools offer cost-effective solutions that drive savings and improve profitability.

The initial buzz around AI tools began with the launch of ChatGPT, which uses large language models to generate text responses based on user input. While ChatGPT and similar tools are powerful, they are just the tip of the iceberg. Today, there are AI tools designed for almost every business need.

AI Tools for Your Small Business Toolbox

Well ahead of the more recent hype around AI, Xero Accounting has increasingly been supporting small business owners’ needs in accounting and financial management and is now a leading cloud-based accounting software product in South Africa. Xero Accounting is equipped with AI-enabled automation in data processing. More specifically, here how Xero Accounting uses AI:

Receipt and invoice scanning – AI-powered software reads your invoices and receipts to capture key data into the general ledger.
Reconciliation and categorization – Xero Accounting finds similar transactions between general ledger and bank transactions (on the bank statement) to automate the reconciliation process. In that process, the software recommends how reconciling transactions should be categorized.
Payments from customers – the software has the capability to search your business bank statement for deposits that match outstanding customer invoices.
Unpaid balances due to you – automatic reminders can be sent to customers reminding them of overdue invoices.
Forecasting – patterns in cashflow history are used to extrapolate likely future cash balances.

Why is MMS Cloud Accounting a Xero partner?

We are a team of entrepreneurs that think like entrepreneurs, delivering a value outsourced accounting service. Delivering value means that we construct our accounting services in a manner that ensures we offer the most comprehensive service to the customer, at the lowest competitive cost.

By bringing Xero Accounting to our clients, we are:

Automating processes removing labour-intensive processes, and thereby extracting data processing costs.
Improving quality by using AI to process information more accurately and swiftly.
Reducing costs by automating processes of a repetitive nature.
Offering real-time insights to our clients, due purely to the rate at which transactions can be processed.
Enhancing security through the in-built fraud detection capabilities of AI-empowered accounting software.

Closing thoughts

Actionable insights are extremely important in running any business, large or small. While AI offers processing power, it’s unlikely to ever replace the role of an accountant, because converting the data processed into actionable insights tailored to your business, requires the insight and interpretation skills of the human mind – the accountant in this case.

We appreciate that the challenge is on us to offer value outsourced accounting services and will continue to use AI software to do so. If you would like a competitive quotation that embraces the cost-savings of the AI capabilities in Xero for your accounting needs, feel free to reach out to our team.