Beyond OCR: How AI Is Transforming Bookkeeping

Businesses come in all shapes and sizes, yet the work completed by accountants and bookkeepers often follow standardised processes. Transaction documents flow in, financial data is classified and recorded, and accounts are reviewed to ensure everything reconciles and aligns with reality.

Whilst the core workflow remains the same, there have been many evolutions in how this is achieved. Within the world of bookkeeping, there was an industry wide shift from manual data entry based approaches to the rise in popularity for tools using Optical Character Recognition (OCR) technology.

However, in the same way that a decade ago the underlying technology shifted from desktop-based to cloud-based, we are at the start of a new wave of technological adoption in the accounting industry: Artificial Intelligence. Not just automation, but real intelligence.

Let us explain

All “data capture” tools in the accounting industry technology stack are powered by OCR. This is a method of extracting text from documents by scanning and identifying characters from images or PDFs. It transforms visual information into machine-readable characters, allowing systems to copy and store data.

Whilst this technology is a great step up from manual processing, it does not go past the task of scanning data. Humans are still required to perform review and reasoning tasks, for example, when the supplier name in an invoice is abbreviated compared to the ledger supplier name (e.g., McDs vs. McDonald's). OCR technology also does not provide any level of intelligence, beyond integrating supplier rules, when it comes to categorisation or in downstream tasks such as VAT compliance.

This results in accounting firms still needing to staff large bookkeeping teams to ensure accuracy and still perform the required reconciliation and compliance work after data is entered. To us at Briefcase, this goes against the value proposition of using technology to save (costly) human time.

Enter Artificial Intelligence. Our proprietary, multi-modal process takes things a step beyond basic OCR. Our AI doesn’t just read the text, it understands the layout, picks out key details like dates, totals, and suppliers, and learns to spot patterns over time. Using this information, AI is able to contextualise information, perform reasoning, and execute downstream workflows – automatically and instantaneously at the point of data capture. It's like having a super-fast, detail-obsessed bookkeeper with photographic memory!

How can AI enhance your day-to-day workflows

Briefcase harnesses the power of AI to drive intelligent automation in three core areas; Data Extraction, Data Categorisation, and VAT Compliance. We achieve this by using AI to execute the tasks that are typically undertaken over the course of a few weeks by bookkeepers, at the point of data capture.

Our automation and learning capabilities are out-of-the-box and do not require the set up and management of supplier rules or other rigid automation solutions. We learn individual nuances for each client’s expense categories and apply these learnings to future invoices. This means that the more you use Briefcase, the more it learns client specific characteristics, and implements changes automatically going forward. This saves time in performing repetitive tasks or having to set up individual rules for each client that still require manual review.

The benefits of AI are not necessarily only seen at the moment of data capture, but in the downstream tasks that rely on the quality of the initial data input. By populating verbose descriptions automatically, you can have the peace of mind that all expenses will have sufficient metadata to make end-of-period reviews a seamless task that does not require a second or third reconciliation of individual transactions.

AI also understands documents contextually (not just copying text), and is able to complete the manual tasks that bookkeepers typically perform when processing data captured by OCR-based tools. By using AI, we are able to simultaneously extract a VAT number, verify it with HMRC, assign a VAT rate based on the purchased item and the relevant VAT legislation.

By automating this workflow automatically, immediately, and accurately at the point of data capture, your team will save valuable time when processing invoices as well as in compliance and reporting workstreams.

Having fewer manual steps and reviews than what typically occurs during the bookkeeping process, firms can save time and process a larger volume of clients / transactions. In fact, our customers noticed that a single transaction can take an average of 60 seconds to process when using an OCR-tool. This is because of the time needed for a human to review, reason, and process. On the other hand, it took an average of 20 seconds per invoice when using Briefcase.

By removing human input in the bookkeeping and VAT compliance workflows, whilst still giving humans full visibility, we free up valuable capacity in the practice to divert resources to higher margin advisory services.

Where Briefcase really shines

Our bookkeeping and financial close solutions have a clear differentiation to other data capture tools on the market. Within our platform, there are a range of areas where Briefcase and the power of AI are the strongest:

• Seamless user interface: Our UI is designed from the ground up to remove the need for complicated settings, interfaces, and team training. From signing up team members to onboarding clients and processing transactions – we are able to use AI to remove the need for humans to change settings, but rather intelligently understand different bookkeeping workflows and data formats.
  
  

• Frictionless data upload: Using AI, we can allow for data to be entered into Briefcase in a range of formats where we automate the historically manual task of sifting through uploads to identify duplicates, receipts, multi-invoice files, non-transactional emails, and more.
  
  

• Smart VAT compliance: We have trained our AI on UK VAT legislation so it can apply HMRC rules and the context it understands from a transaction to assign the correct VAT treatment, including reverse charges and zero-rated goods. It also extracts and validates VAT numbers automatically to help maintain compliance without manual effort.
  
  

• Intelligent GL categorisation: Our AI agent considers the context of each transaction including what was purchased, why, and how it relates to past patterns – to assign the most appropriate general ledger account. It identifies similarities and differences between transactions, even across varying suppliers which is a limitation for traditional supplier rules. This learning is unique to each client account and strengthens over time. 
  
  

• Automated descriptions: Every transaction and line item is paired with clear, meaningful descriptions that are automatically generated at the point of capture and accurately. These are essential for tax reporting, client visibility, and advisory insights, and eliminate the burden of manual note-taking and description editing entirely.
  
  

• Line Item Splits: Line-level data is automatically grouped and split based on VAT treatment and expense type. When separating service fees from goods or identifying zero-rated items, our AI ensures each entry is accurate, compliant, and optimised for downstream accounting and compliance.
  
  

• Prepayment detection: We are able to detect prepayments at the point of data entry using the power of AI. We can then automate the scheduling of journal entries and managing end-of-period tasks because AI is able to perform the reasoning process of identifying a prepayment and perform downstream tasks for you.
  
  

From the moment a document is captured to the final journal entry, our AI handles the post-review bookkeeping tasks that traditional tools leave behind. It’s replacing tedious, expensive manual work with real intelligence that will only get smarter and better with usage.

In trials with customers so far, we measured 3x increased bookkeeping efficiency with experienced professionals noticing clear downstream benefits from adopting AI in their practice.

Click here to schedule a discovery call with our growth team to see how your firm can stay at the forefront of AI adoption within the accounting industry.