The performance of machine tools depends on their working accuracy. The paper presents a new approach for in-process monitoring the geometric and kinematic accuracy of a machine tools. This approach utilizes a virtual sensor for capturing displacements at the tool center point (TCP). The virtual sensor is set up by using a data-driven approach based on extended transmissibility functions. The input data for monitoring are the NC internal data. The transmissibility functions are established via standard experimental procedures such as double ball bar (DBB) tests tests and estimation of frequency response functions (FRF). The data from the virtual sensor can be used for process monitoring and troubleshooting when launching a new process.