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How AI Tech is Digitalizing Paper Bank Statements and Simplifying Bookkeeping

9th Jan 2024
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Receipt Bot is a robotic data entry assistant for accountants and bookkeepers. Leveraging the...
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Efficiency is key for accountants and bookkeepers when managing large volumes of client data. This is particularly important for bank statements – the core source of truth when it comes to tracking and reconciling transactions.  

AI Tech Simplifies Bookkeeping with Paper Bank Statement
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However, if the statements are not readily available through online banking integrations, onboarding a new client who brings in a large stash of paper statements could be daunting. The traditional approach to converting bank statements from PDF to CSV, plugging any gaps in formatting and fields with manual data entry, is time-consuming and prone to errors. 

Existing solutions rely on basic Optical Character Recognition (OCR) to ‘read’ the bank statement and extract the data into a CSV format. However, this technology – dating back decades – can be unreliable, and the output requires significant manual work to fix and structure data into the right format. What’s more, any errors in your baseline bank data or a simple error of mapping debits and credits incorrectly can then create headaches down the line when it comes to uploading data to your accounting software or bank reconciliation. 

The rise of AI tech has created the means to enhance the accuracy, speed, and efficiency when working with paper bank statements, opening the door to dramatic improvements in pre-accounting tasks and bringing OCR in the now. 

The Power of Context-aware OCR 

OCR is a valuable starting point for data extraction, but it faces the same problem that many isolated technology tools do – it lacks context. The key that we have found at Receipt Bot is using machine learning to help it adapt over time to the needs of accountants and bookkeepers. 

  • More Accurate Data Extraction: Combining OCR/ICR technology, natural language processing (NLP), and machine learning technologies, Receipt Bot performs over forty arithmetical and logical accuracy validations, ensuring virtually error-free data extraction from PDF bank statements. 
  • Intelligent Sorting & Validation: Using context-specific training, Receipt Bot recognizes statements by account type, such as bank, card, loan, or PayPal accounts, enabling it to standardize data and ensure that transactions are correctly recognized as money in and money out. Further, the system fills any gaps in specific fields, e.g. missing date or year values against transactions. These capabilities significantly reduce the time spent sorting through pages manually inputting or fixing data. 
  • Simplicity and Ease of Use: In contrast to other OCR solutions that require complex template setups, Receipt Bot offers simplicity, allowing users to convert PDF or paper bank statements to Excel or CSV and many other accounting software compatible formats, such as QFX, OFX, IIF, and QBO. 
  • Cloud-Based Convenience: Receipt Bot is built in the cloud, providing flexibility and accessibility for modern businesses. Users can access the service from anywhere with just an internet connection, making it an ideal solution for busy accountants and business owners. 

A clear view of bank statements for better accounting 

Bank statements are full of data, but not all are relevant to you and your clients for bookkeeping or accounting purposes. For example, one of the first hurdles we faced was to pick only lines with an accounting impact and exclude additional lines, such as sub-totals, carry forward balances, or summaries, a task that confounds regular OCR software. 

After extensive training, our tool can now correctly place values in their respective columns, even in complex statement formats, removing hours of manual work for accountants. 

  • Excluding Unnecessary Data: The software has machine-learning algorithms that distinguish relevant financial data from extraneous information, streamlining the data for import into accounting software like QuickBooks Online or Xero. 
  • Sub Account Extraction: Receipt Bot can identify and separate transactions for different cards or accounts within a single statement, a critical feature for detailed financial analysis. 
  • Separate Transactions for Service/Charges: The platform analyses the impact of service charges or fees on the statement’s balance and creates separate transactions for them, enhancing the utility of the data for bank reconciliation purposes. 
  • Extraction of Check Transactions: Receipt Bot standardises the format of check transactions and offers the option to process checks attached at the end of the statement separately as invoices. 
  • Download all Statements in One File: After data extraction, you can download data for all your statements in one file for each account for uploading to accounting software or offline analysis.  

Get started with AI and bank statements 

We believe the key to bringing the power of AI and OCR to accountants is making it user-friendly and accessible. The process in Receipt Bot is easy for both advisors and clients, and you can start digitalizing paper or PDF bank statements in three simple steps;  

  1. Upload PDF: Bank statements can be uploaded via web, email, web, or an API. 
  2. Review Output: Briefly analyse the extracted data for accuracy using our intuitive web app. 
  3. Download & Start Accounting: Export the data to your preferred format, and you are good to go. 

In a business environment where time is a precious commodity, automating the conversion of bank statements to CSV with a tool like Receipt Bot is becoming more than a convenience; it’s a necessity.  

To find out how you can streamline your bank statement uploads and focus more on using the data, sign up for a free trial of Receipt Bot today