The Ambitious Bookkeeper Podcast

232 | Using AI in Bookkeeping

• Episode 232

Share episode

Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.

0:00 | 22:24

Send us Fan Mail

AI is changing the bookkeeping game, but it's not replacing us anytime soon.

In this episode, I'm pulling back the curtain on Xero's built-in AI feature, JAX (Just Ask Xero), and walking you through exactly how we're testing it inside our own firm before rolling it out to clients. From auto bank reconciliation to creating invoices via conversation, there are some genuinely cool time-saving features here, but there's still a lot you need to be doing yourself.

In this episode you’ll hear:

  • How JAX works inside Xero
  • What security and data privacy measures are in place
  • How the auto bank reconciliation feature works
  • How JAX can look up vendor information from the web while you're coding transactions
  • How to use JAX to create invoices, pull up open invoices, and even build quotes

Resources mentioned in this episode:

Thanks for listening. If this episode inspired you in some way, take a screenshot of you listening on your device and post it to your Instagram stories and tag me @ambitiousbookkeeper

For more information about the Ambitious Bookkeeper Podcast or interest in our programs or mentoring visit our resources below:

Thank you for your support of our show. If you haven’t left a review yet it’s super simple. Please go to ambitiousbookkeeper.com/podcast and leave your review.

Podcast Publishing Tools we use:

Join the next free training >

AI is probably here to stay. So we've been testing it out inside of our firm, and I'm not just talking about using it for marketing and writing and all those other things. We are actually testing out the bookkeeping functions within the program we prefer to use, which is zero. I'm Serena, I'm the founder and CEO at, of course, financial and online business accounting firm where we help e-commerce online creatives and consultants. Understand their numbers so they can grow their numbers and have massive impact. I'm also the founder and mentor at the Ambitious Bookkeeper where we mentor and coach other bookkeepers and accountants and. In today's video, I'm going to talk about the AI feature that is now built into Xero. Right now it's in beta, so you do have to opt in to be able to use it, but I'm gonna talk about, uh, how it works, what it can do, what it cannot do, and what you should be doing still, even if you are using. The built in AI function and what's really important to understand is a lot of people think AI can really take over the bookkeeping, and it still has a long ways to go, but there are some functionalities that are making our work more efficient, which we're always trying to find more ways to do things more efficiently. That we can spend our energy and time focused on actually adding value to clients rather than doing the mundane, repetitive tasks that no one really wants to do. So let's talk about Zero, and it's built in AI function known as js. It's the acronym JAX for just ask zero and we're gonna talk about. how it works. So I've been doing my own research on this because I wanted to really understand how it works, what the security measures are and all that good stuff before I actually started using it and implementing it across any clients. And as of right now, we have not implemented it across any of our. Actual clients, we're using it on our own books. And my other company, so I have two companies and I run them both on the Xero platform. I am testing them out on my company so that I can really understand how it functions and be able to alert my team and, and work through all of the issues that we see before we really roll it out to our clients. Not only that, but like I said, it's in beta right now, and in order to opt into it, you have to. Start the conversation with Jax, and at that point it will start looking at your company's data and, gaining insights from that. So let's talk about actually how it functions and how it will utilize that data. If, you are interested in activating Jax in your zero file, or even if you're brand new to zero. setting it up and implementing and using the AI function right away. So, like I said, you have to opt into it. You will not be able to opt into it until you decide to start the conversation with Jax. And in a moment, I will show you on a screen what that looks like. Jax does not train on your business data, meaning, The AI platforms that it uses, whether it's Microsoft, Amazon, or open ai, it does use large language learning models , but it will not learn on your data. It will use that model to process your data and answer your question or do whatever action you're asking it to. but it doesn't store your data and train the models Across the sphere. the AI also sits inside of so it adheres to zero's. Same security standards that it holds for its general cloud software. And this was a big question mark for a lot of people when we started transitioning to the cloud. What about security? So they are implementing the same security measures around their AI function as they do with the general data that is inside of Xero. Um, they are SOC two compliant. They follow global standards for data protection. They're iso. 2 7 0 0 1. I may not even be saying that how, like the industry people say it, but those are the standards that they have. I've done the research, I've done my own due diligence, as should you, anytime you implement a new software, whether it has AI or not, you need to know the level of security it, adheres to before you start loading sensitive information into it. So that is how. Their AI platform works. I'm going to link the resources that I've gotten this information from in the show notes, below this video so that you can actually do your own due diligence. But without further ado, let's jump over to the platform and I'm going to show you exactly, how do use JAKs, how to use the AI inside of Xero and what it can do. And then I'm gonna show you how to double check things if you are using some of the features. That, does some of the work for you and how to fix anything if you find errors. So let's go. Alright, here we are on our homepage inside of Xero. This is the new layout where you can adjust all your widgets and everything. Not gonna get into it on this video, but I will have another video, available soon. If you're watching this later on, I'll link it above, for you to learn how to use the new Xero layout and all of Xero when you come onto your home screen, there's this little star looking icon at the top where you're going to click on it. It's for Jax, just ask Xero. And I actually was playing around with it earlier to see what all it could do. So it does save your, conversation history for that day. Here's what. You can do with Jax. you can use this to have a conversation with it and find out information, within your business or about your customers, about your vendors, things like that. you can also utilize Jax within the bank reconciliation. So I'm gonna go into one of our. bank accounts that I know I have it turned on on, I don't have it turned on on every account, and that's because of our specific workflows that we perform. We always start with Hubdoc. We process the documents and then we come into Xero to match them. So if we were to have. auto bank reconciliation turned on the AI bank reconciliation feature turned on within the accounts where we know we're gonna need to be matching bills and receipts that we're forwarding from Hubdoc. It, it might screw things up. I haven't tried that yet. I was afraid of turning that on. So on a few accounts, we don't have it turned on. So all the accounts that we actually. pay money out of. We don't, we do have it turned on for our income accounts where money is coming in, and stripe and PayPal and things because it's very predictable and we know it's just money coming in. Mostly not money going out. So I'm gonna go into one of the accounts. I know I have it turned on with, and it looks like it's already reconciled. See, it has this green reconciled check mark. And so I'm gonna go in there and actually double check what has been done. So I'm gonna go view transactions. And it should always be reconciled if you have the auto bank reconciliation feature on for the most part. When you go to this reconcile tab, You also have this at the top of your screen where it shows how many line items were reconciled in the last 30 days, and how many of them were auto reconciled. So then you can click on view, all reconciled. You can adjust your settings in that screen. And when you come to this screen where we're at, it will show you. And give you the opportunity to remove any errors and it shows you the methodology it uses. So we have rules set up, and this is why those transactions were categorized properly because we have rules set up based on the bank description, and the price point and all these other things. So if you already have bank rules set up. The auto reconciliation feature will look to those first. If there isn't a bank rule set up, it will look to where you've previously coded things and go by memory. So that's where it shows the Method is memory here. and then if you keep scrolling down, it's pretty much pulling memory for all the bank transfers, And so in this screen, you can actually see what the reference was from the bank account, what the transaction description is going to be, the new payee or whatever, and then. The document type and the account code, and this is the part that's really important that you need to pay attention to. Obviously these others are also important, but this is where it's gonna show up on your p and l, in the right or wrong bucket. So if it is perhaps in the wrong bucket, what you can do is click, remove and redo, and then. Code it yourself. You can also adjust the columns that are available. So if you want to make sure that there's a check number, if you use checks, if you wanna see any other information that could possibly be, available. Okay. It looks like this note column would probably be useful in this instance because it's showing what's coming through on the bank feed as the description. So I'm gonna leave that on for future reference. And if you wanna skim through and look through things, you can, do that. And then when you're okay with it, you can X out of that and then seems like it's doing a good job. So that's how you would double check your auto bank reconciliation. And up here is where you would turn it on for the account. So you have to go into each account that you. Have and turn it on or off. Um, I'm gonna cancel that because I wanna leave that one on.. Now, the next step that you have to the AI reconcile your bank accounts, is actually reconcile your bank accounts I will link that video here so you can go learn how to do that process. But now let's get into what else Jax can do for us. We can actually have Jax look up information from the web as we are reconciling or coding other transactions if we need to.., We can ask it to search the web that we know how to code it. I did also ask if it could look inside of Xero to see if we had previously coded it somewhere. It really struggled with that one. So that's still gonna be a manual process for now, where we use the lookup feature and we just searched the vendor name. And so for this instance, I was using Kajabi as an example again. and so if you search up the vendor here, you can drill down into it. Or look at a previous transaction just to open a new tab and see where it had been coded. but if it's a new vendor, it's really helpful to be able to, within Xero, not have to open another window and Google something and then kind of sift through the results. You can just say, Hey, I have a new vendor here. what kind of company is this? And where should it be coded? What services do they provide? And so it was able to pull the general information from the web. you can direct it to search from the web or within Xero, and it pulled up the name, where they're headquartered, who the CEO was and what their business model and revenue streams are. So this is really helpful to know their revenue streams because now I know. This is a subscription, a software subscription, because it's a SaaS platform. So this is gonna be a really helpful feature for bookkeepers. If you are doing your own books, you should know what your vendors are and where they should be coded. But this might also help you in case you're like, I don't know where I should code this. the next thing you can use JAX for is financial Insights. So you can come here to use Jax and ask it to look for information within your own business, or you can also use it within the reporting feature. So let's pop over there real quick. So you were going to go to reporting and dashboards. And this will bring you to the Sift Analytics dashboard where you can actually ask it to interpret the information for you. it's a really cool feature. I'm gonna do a whole nother video on sift analytics later on. but you can even get fortnightly predictions. This is. This is when the UK and Australia versions of Xero really, really shine through. because here in the US we don't really use the word Fortnite. and then you can look at benchmarks as well. so once you're in your dashboard, you can arrange it however you want. Like I said, there's gonna be a future video about this., But below each widget it gives you this little get AI insights. So you can click on that and it will explain to you. What these numbers really mean. And so this is a really cool feature for business owners who maybe can't afford to work with a bookkeeper to give them these insights. Or maybe you are already a little bit more financially savvy, you enjoy this kind of stuff. You can come straight here and learn about your business. now let's jump over to another feature that you can do with Jax, and that is invoicing. so I'm gonna come back to this tab where, I already have Jack's open, so I'm gonna ask it. Um, can you create an invoice for, of course, bookkeeping. to charge them for. Shared software. So this is a real thing that I do. I have, um, this company and then I have my accounting business and they're each on separate zero files. And so, occasionally I will pay for something through one business and invoice my other business for it. So now Jax is asking me, could you please provide the details for the invoice, such as the description? The amount, the quantity, and the currency. Alright, so, the description is, export my data. amount is 100 USD. quantity is one. And I think that's it. Please make the invoice due upon receipt. Let's see how it does. It says it's setting up my invoice now. The invoice has been created awesome. And it gives you the link where you can review it, but it does ask if you would like me to approve this invoice so it can be sent to the customer. I'm just gonna click on it and see how it turned out. This is that process where we review things before we trust them, just like we would with a human being. If I had someone else coming into my business to take over this type of task, I would want them to create the invoice in draft mode and let me review it and approve it first. So I'm gonna do the same thing with ai. I'm not just gonna give it the reins until I. Fully trust it. So looks like the contact is correct. The issue date is today, the due date still comes up as March 23rd. it didn't change that, it should have changed that, but, this is probably because I have a default due date for this customer. Uh, let's see. It's got the description correctly and it's coding it to, due from OCB, which is previously where I would have coded it, but now I'm going to code it to client software because that's where it hits. So I'm just gonna have it basically reverse it out. It all looks good at that point, so if I was happy with it, as you can see, it's still in draft. You can approve and email it right away. You can approve it, or you can approve and text it or approve and add another. So I'm just gonna save it and close it for now. I might wanna come back to this Let's see what else Jax can do. Can it look up information about, open invoices? Which spoiler alert, I think it can. So I'm gonna just test it out, and open it back up. Can you tell me, what all invoices are still open and do. All right, so it gives me a little table. It looks like there's just, one and it shows the days overdue and it gives the link and the amount and all that good stuff. so yeah, this is a pretty cool feature. Let's see how it does with quotes. Can you create a quote for a new customer? So all of these conversations that I'm having with it, you can actually have via email or, text message or WhatsApp. so I haven't played around with those, but I do know that there's some things that you have to do to activate all of that and verify it. But essentially, if you're having a, conversation with a customer. Via email and there's a lot of back and forth, and you wanna create a quote from that email thread. You can then send that entire email thread to JAX and have it create a quote. So it's asking me for more information as it should. It needs a customer name, a description of the product or service, the quantity. Unit price and currency, and then any additional notes or terms for the quote. So these are some of the cool things that you can do with Jax. The one last thing that I don't think we talked about was using it for help. So there's this question mark where you can just search the help documentation for information that you need, or you can ask zero to give you information. So one of the things that I was looking up earlier that I went directly to the help, Documentation for was information about how secure their AI is and how that whole process works. So I'm just gonna ask Jax and see what it says. Can you give me information? On how JS works, what kind of security does it have, and where is it pulling data from? Let's see how honest it is. All right, so it says, here's an overview of how JAX works, it's security, and where it pulls data from, what it can do, um, it's security data sources, and then it links out to the actual resources. So there you have it. That is what you can basically do with JAX inside of Xero. As of right now, when this video's recorded in beta, it's March, 2026. I will try to stay. Uh, up to date and keep you all updated on the developments with Jax. And if you are a bookkeeper, an accountant, they've rolled out some cool features to be able to use Jack's, uh, overall across all of your clients to gain insights. So that's pretty cool. I'll be doing a video of that and if it's ready, it'll be linked here. If you are brand new to Xero, I highly encourage you to head over and check out my zero playlist. That is also going to be linked where you're watching this video. In summary, there's some really cool features that you can be using to speed up your bookkeeping process, but it still requires quite a bit of oversight. So if you are a small business owner, if you are in the online space, if you're an online creator or e-commerce. Brand and you want help with your bookkeeping, please reach out to me. We are at of course, financial.com. can also comment below this video, and if you are a bookkeeper or an accountant and you are interested in starting your own virtual bookkeeping business, whether or not you use Xero, I can help you. Please head on over to ambitious bookkeeper.com and check out what we have going on.

Podcasts we love

Check out these other fine podcasts recommended by us, not an algorithm.

Accounting High Artwork

Accounting High

Accounting High