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Reconciliation is a knapsack problem

moderntreasury.com

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Re: Reconciliation is a knapsack problem

#31

Post by lazide »

thfuran wrote: post #16
DecoPerson wrote: post #14

Earlier quoted context omitted.

I have 15 debtors, a few dozen creditors, and 5 employee credit cards. There’s enough transactions that for the 3 years I’ve been reconciling the accounts I have wanted to either write an if/elseif/else-based reconciler assistant, or hire someone, or pay my accountant to do the job. A few weeks ago, I decided, what the hell, and I spent two days writing a ChatGPT-powered reconciler assistant. It’s so damn accurate. B…

Whether something is better than nothing depends on its error rate and the consequences of an error.

And the awareness that nothing is perfect, including manual reconciliation.

Re: Reconciliation is a knapsack problem

#32

Post by bradteamworks »

DecoPerson wrote: post #14
benreesman wrote: post #8

I profoundly disagree that ML models are a good fit for transaction reconciliation. It’s at least arguable that this task is the oldest documented use of writing, and from double-entry accounting to price/time precedence in modern market microstructure, we have algorithms that align very well with human intuition. I can think of few cases where gratuitous application of even simple statistical methods would cause mor…

I have 15 debtors, a few dozen creditors, and 5 employee credit cards. There’s enough transactions that for the 3 years I’ve been reconciling the accounts I have wanted to either write an if/elseif/else-based reconciler assistant, or hire someone, or pay my accountant to do the job. A few weeks ago, I decided, what the hell, and I spent two days writing a ChatGPT-powered reconciler assistant. It’s so damn accurate. B…

Would you be willing to share your approach? I'd love to see it. Disclosure: I'm in the early stages of an open-source ERP: https://github.com/barbinbrad/carbon

Re: Reconciliation is a knapsack problem

#33

Post by imtringued »

I was thinking that they were talking about netting/clearing and how to minize the amount of transactions that need to happen as actual wire transfers.

Actually no. This post is about doing something akin to first in first out accounting to match the payments to the invoices.

I wonder why they aren't simply using virtual IBANs...

Re: Reconciliation is a knapsack problem

#34

Post by withinboredom »

thfuran wrote: post #16
DecoPerson wrote: post #14

Earlier quoted context omitted.

I have 15 debtors, a few dozen creditors, and 5 employee credit cards. There’s enough transactions that for the 3 years I’ve been reconciling the accounts I have wanted to either write an if/elseif/else-based reconciler assistant, or hire someone, or pay my accountant to do the job. A few weeks ago, I decided, what the hell, and I spent two days writing a ChatGPT-powered reconciler assistant. It’s so damn accurate. B…

Whether something is better than nothing depends on its error rate and the consequences of an error.

Right. Like now I'm wondering if I should edit my statement description in Stripe to be adversarial to AI reconcilers; just for giggles.

Re: Reconciliation is a knapsack problem

#35

Post by ketralnis »

whatever1 wrote: post #4

lol at ai for solving deterministic knapsacks. Just get yourself a solver. And if you wanna solve billion item sized problems hire an OR scientist to write a decomposed algo. Literally after 2 minutes of search: https://arxiv.org/pdf/2002.00352.pdf

I'm extremely skeptical of LLMs solving problems outside of "reproduce text that a human wrote in the past" problems. Which to be fair a lot of problems can be surprisingly reduced to, but still I'm much more skeptical that it seems most HNers are.

That said:

> lol at ai for solving deterministic knapsacks. > Just get yourself a solver.

I don't think these are necessarily in conflict. "write me some Z3 code to solve this knapsack problem, then run it and tell me what the output means" seems like it might actually be in the right realm. The LLM isn't doing the solving, which makes sense because I agree there's no mechanism by which an LLM would be better at it than a solver, but as a UX to the solver it seems like it'd do okay. That's genuinely value added, I don't expect most accounts or even programmers to be familiar with Z3.

Re: Reconciliation is a knapsack problem

#36

Post by Semitangent »

Can someone help me understand the premise of this article? I think the goal here is to map the internal books of a business to their bank account, but I have never seen the kind of "grouping" the article seems to assume as given. In which scenarios do these groupings happen? If there are several customers, there will be different invoices and therefore separate payments. Why would the bank just throw them together, thereby creating the problem this article is trying to solve? I'm asking from Germany, in case this is one of these Europe-US kinds of differences.

Re: Reconciliation is a knapsack problem

#37

Post by snapcaster »

thfuran wrote: post #16
DecoPerson wrote: post #14

Earlier quoted context omitted.

I have 15 debtors, a few dozen creditors, and 5 employee credit cards. There’s enough transactions that for the 3 years I’ve been reconciling the accounts I have wanted to either write an if/elseif/else-based reconciler assistant, or hire someone, or pay my accountant to do the job. A few weeks ago, I decided, what the hell, and I spent two days writing a ChatGPT-powered reconciler assistant. It’s so damn accurate. B…

Whether something is better than nothing depends on its error rate and the consequences of an error.

Fair, but also humans working manually don't have a 0% error rate

Re: Reconciliation is a knapsack problem

#38

Post by _3u10 »

evrimoztamur wrote: post #6

As somebody who worked as an accountant, I saw several times where automated reconciliation solutions devastated books with repeat mistakes and lacking audit logs. I saw interns do the same, too. An automated solution to reconcile statements based on LLM matches removes transparency on how your books are prepared and might create a false sense of trust in the preparation of your books. In case of an audit, people wil…

Haven't even gotten to processing fees and taxes.

Re: Reconciliation is a knapsack problem

#39

Post by daft_pink »

evrimoztamur wrote: post #6

As somebody who worked as an accountant, I saw several times where automated reconciliation solutions devastated books with repeat mistakes and lacking audit logs. I saw interns do the same, too. An automated solution to reconcile statements based on LLM matches removes transparency on how your books are prepared and might create a false sense of trust in the preparation of your books. In case of an audit, people wil…

I agree with you. I feel that when faced with books with large amounts of transactions that have similar dollar amounts, you simply need to take another step in terms of reconciliation to make sure you are matching the correct transaction to assure the other side of the transaction versus matching the bank balance. You can't just use machine learning to try and match these transactions, but need a specific process to match them.

I think this is a niche issue related to accounts receivable potential errors as most companies I work with don't have the problem of constant repeating amount transactions.

Re: Reconciliation is a knapsack problem

#40

Post by daft_pink »

DecoPerson wrote: post #14
benreesman wrote: post #8

I profoundly disagree that ML models are a good fit for transaction reconciliation. It’s at least arguable that this task is the oldest documented use of writing, and from double-entry accounting to price/time precedence in modern market microstructure, we have algorithms that align very well with human intuition. I can think of few cases where gratuitous application of even simple statistical methods would cause mor…

I have 15 debtors, a few dozen creditors, and 5 employee credit cards. There’s enough transactions that for the 3 years I’ve been reconciling the accounts I have wanted to either write an if/elseif/else-based reconciler assistant, or hire someone, or pay my accountant to do the job. A few weeks ago, I decided, what the hell, and I spent two days writing a ChatGPT-powered reconciler assistant. It’s so damn accurate. B…

I wrote one using fuzzy logic once that was super successful as well years ago, but it wasn't something I would use on audited transactions.
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