When doing internal auditing, the most important thing is to ensure that accounting entries are classified to the right chart of accounts. However, when you have different accountants, they all will have different interpretations when doing auditing. Not all of your accountants may have the same way of interpreting which accounting entry does into which account. Can you solve this issue with text classification?
What is Text Classification?
Firstly, what is text classification? Text classification is the process of categorizing text into organized groups. By using Natural Language Processing (NLP), text classifiers can automatically analyze text and then assign a set of pre-defined tags or categories based on its content.
How does it work?
Secondly, how does it work? First, we export out all the accounting entries with the right chart of accounts. We then do pre-process to look for stop words. Stop words are words that will not make a difference to our classification. Once we have these ground-truth data for training, we use it to train our text classifier.
So how does this help with your internal auditing? Once trained, Gleematic will be able to read through all the accounting entries and check for any errors. If there is a wrong classification, Gleematic will highlight them. Those entries will then be double-checked by your staff. However, if there was nothing wrong with it, you can add it to the training data. When you add more data into the training model, Gleematic will improve and be more accurate in the future. Gleematic will be constantly learning for you in order to help you in your business processes.
What are the advantages of using Gleematic for internal audit?
- When using Gleematic, it ensures consistency, reducing human errors.
- Gleematic is cost effective, reducing your external auditing costs
- Your employees can be freed to do more value-added tasks
- You get to save manpower as you no longer need that many employees to do auditing
- Gleematic is 3-5 times faster than humans, making you complete your financials closing quickly
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