Digital Financial Reporting

No code or low code is another buzz word that is being thrown around. For example, XERO is saying that they have an initiative to eliminate coding.  But what exactly does "no code" mean?  How do you get the job done if you don't have "code"?  What exactly is it that accountants will see as a benefit?

Starting with the benefits, XERO says this:

“For millions of small businesses, we can just get rid of (reconciliation). We are signalling to the accounting industry that what’s just over the horizon is already here.”

I am totally on the same page as XERO in terms of the benefits.  Getting rid of reconciliations and those sorts of things can happen.

But, this and other improvements cannot happen with machine learning alone.  As I mentioned in another blog post, you want to use the right tool for the job.  There are two approaches to implementing artificial intelligence: 

• Rules-based (deductive logic, expert systems)
• Patterns-based (inductive logic, machine learning)

The "no code accounting rules" will take both rules-based and patterns-based techniques. 

There is another thing that needs to be considered which is the type of rules: 

Imperative and declarative each has pros and cons. Declarative rules are more reusable, easier for business professionals to understand, are encouraged by the business rules manifesto, and growing in popularity.

Also, declarative rules can be represented as NFTs.  These NFTs are rules-based and declarative rules that will replace "code" created by software engineers. Auditchain is leveraging NFTs to achieve exactly that. NFTs can make it impossible to tamper with rules, helps you understand how stands behind the rules, and improve trust in the rules.

And so, it is not by just not "coding" that accounting reconciliations can be automatically performed.  There will still be code, but the code will be in the form of an "engine" that then processes the declarative rules.  This makes it so business professionals can maintain the rules rather than having to rely on IT professionals.

For more information on this topic see my blog posts Rules as Code and Logical English.

#####################################

Building Rules