Predicate Logic Tax System for Automated Accounting Entries

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Solution Overview

Problem

Current tax and accounting software lacks the ability to accurately apply tax and accounting principles to specific business transactions, requiring manual effort and relying on human expertise, and fails to efficiently process and record the tax consequences of transactions.

Innovation Solution

A computerized predicate logic system that translates authority documents into logical statements, indexes them for search, and uses a comparison and inference engine to provide conclusions on tax and accounting issues, facilitating automated processing and recording of transaction consequences.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If manual processing by accountants is used to determine tax and accounting treatment, then accuracy in applying principles can be maintained through human expertise, but time consumption and processing effort increase significantly

Engineering Contradiction:

Improveaccuracy of tax and accounting principle applicationVSAvoidtime consumption for tax and accounting processing

Core Design Contradiction:

Measurement precisionVSLoss of time

Solution Approach 1:

The patent replaces the mechanical human expert system with an automated computerized system that uses natural language processing, semantic analysis, and rule-based reasoning engines to process transactions, determine applicable tax and accounting principles, and generate journal entries automatically, thereby reducing time consumption while maintaining accuracy through systematic computational methods

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The system enables self-service processing where the software automatically identifies transactions, retrieves relevant authority documents, applies tax and accounting rules, and generates accounting entries without requiring manual accountant intervention for routine processing, freeing human experts to focus on complex judgment cases

Inventive Principle:

Principle #25Self-service

2Productivity

If current tax and accounting software is used, then basic processing can be performed, but the system lacks the ability to accurately apply tax and accounting principles to specific transactions, reducing reliability

Engineering Contradiction:

Improveprocessing efficiency of transactionsVSAvoidaccuracy of tax and accounting principle application

Core Design Contradiction:

ProductivityVSReliability

Solution Approach 1:

The patent introduces an intermediary layer consisting of natural language processing modules and semantic analysis engines that bridge the gap between transaction data and tax/accounting principles, enabling the system to accurately interpret transaction contexts and match them with applicable rules from authority documents, thereby improving both productivity and reliability

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system performs preliminary actions by pre-processing and indexing authority documents (tax codes, accounting standards, regulations) into structured knowledge bases before transaction processing, allowing rapid retrieval and accurate application of relevant principles during transaction processing, thus enhancing both speed and reliability

Inventive Principle:

Principle #10Preliminary action

3Reliability

If manual review and auditing by independent CPAs is performed, then reliability of accounting entries can be ensured, but time consumption and processing costs increase

Engineering Contradiction:

Improveaccuracy of accounting entry recordingVSAvoidtime for review and auditing

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The patent implements feedback mechanisms where the system automatically generates accounting entries with embedded audit trails, applies consistency checks against established principles, and provides real-time validation, reducing the need for extensive manual auditing while maintaining reliability through systematic self-verification processes

Inventive Principle:

Principle #23Feedback

Data Source

PatentUS11295393B1Determining correct answers to tax and accounting issues arising from business transactions and generating accounting entries to record those transactions using a computerized logic implementation

Publication Date: 2022.04.05 ORPHYS HENRY A

AI summary

Pertinent natural language authority documents are translated into corresponding statements in a system of predicate logic which statements are encoded into relations in a programming language. The authority documents are indexed into an electronic database to facilitate subsequent searching. User-entered query terms and/or query terms derived from pertinent prose are obtained, specifying at least one of a tax problem and an accounting problem; based on same, the electronic database is searched to locate applicable authority(ies). A comparison and inference engine executing on at least one hardware processor is activated to apply applicable relations in the programming language to a problem ascertainable from the query, to obtain a conclusion by applying derivation rules in the system of predicate logic. The conclusion is presented to a decision maker.