Small business accounting platform Thriday is launching a new AI system that tracks business spending to automatically prepare a tax treatment, a development CEO Michael Nuciforo claims as an Australian first.
Publicly announced on Tuesday, the new system applies AI algorithms to business bank accounts launched on the Thriday platform, tracking transactions it deems to be business expenses and pre-emptively sorting them into different tax categories.
Speaking to SmartCompany, Nuciforo said the system is able to categorise what counts as a fuel expense and what counts as an office expense.
“We’re then able to do the tax treatment of that automatically as well,” Nuciforo said.
The AI system has already been trained on 70,000 real-world transactions, he added, while claiming it will only become more accurate as further spending events become available as training data points.
The system is currently limited to business bank accounts opened through Thriday, meaning small businesses and sole traders which rely on separate bank accounts will not be able to make full use of the AI-powered system.
However, Nuciforo claimed it still represents a major development when compared to the systems of competing accounting platforms Xero and MYOB, which have long utilised advanced sorting algorithms away from the user’s view.
“Typically today, there’s so many different bank accounts, and there’s so many different debit cards,” he said.
“They all have different ways of presenting the transaction data that they have, and this makes it impossible for Xero or MYOB to train or create an AI system, because there’s so many different variables.”
As accounting platforms continue to put AI front-and-centre of their offerings, Nuciforo is adamant the technology won’t replace accountants, but has the potential to weed out the most arduous number-crunching involved with the profession.
“We’re not anti-accountants,” he said, suggesting new technological tools could enable accountants to engage in more strategic business advisory work of benefit to their clients.
In doing so, Nuciforo echoed the views of Lawpath founder Dominic Woolrych, who said his platform’s AI-powered small business legal advice system is not yet a replacement for real-world lawyers.
On the possibility that Thriday’s AI system cooks up incorrect advice or tax guidance, Nuciforo maintains that, like tax returns compiled by a human, the system is only as good as the data put in by its users.
Users are able to double check and sign-off on AI-generated tax return estimates before Thriday lodges them on their behalf, he added.
“We wouldn’t be here offering that type of functionality if we weren’t confident in the system we have built,” he said.
The new AI system is not Thriday’s first dalliance with the technology.
Beyond the new bank account system, Nuciforo said Thriday already uses AI for its tax estimates and cash flow expectation reports.
It also already utilises a chatbot powered by ChatGPT, but Nuciforo says there is further potential for the technology as it pertains to personalised advice.
“Today, it’s more of a generic chatbot,” he said, capable of answering questions like “what is income, what is an income statement and how to calculate it”.
“In the future, our plan is to very much make it personalised to your business.
“You’d say, ‘What was my income for financial year 23?’, and then we’ll actually use the data set that we have on that business.”
Thriday is hardly the only enterprise to consider that use case, with global payments platform-turned-fintech Square considering a future where users can ask AI programs for tailored advice based on their business data.
While acknowledging the way competitors are experimenting with AI, Nuciforo said Thriday has an advantage through its strong relationship with Microsoft — a massive investor in ChatGPT creator OpenAI, and the company behind the Microsoft for Startups program, which Thriday completed in 2020.
“It’s been hugely advantageous for us, we see it as an absolute superpower on our platform,” he said.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
