How to Use ChatGPT for Accounting and Finance
Companies in the financial services industry invested a whopping $35 billion into artificial intelligence in 2023. From automated software powered by AI to chatbots that work around the clock, tech fueled by AI is revolutionizing financial management. Learning how and when to integrate ChatGPT for accounting could help you enhance your decision-making process and streamline operations.
ChatGPT for Accounting: Is It Possible?
ChatGPT is one of the most popular examples of AI language models used to understand and respond to human inputs. In lay terms, it’s an interface that allows you to enter text, or a prompt, that asks for a specific set of information. The AI can answer with text, images, and even virtual performances.
Using ChatGPT for accounting, you could:
Come up with prompts that help educate new hires on the basics of finance, accounting, and taxes — especially how they relate to your winery or CPG business.
Summarize financial data and generate related insights.
Compare documents, such as expense reports, to find errors and ensure consistency.
Analyze past data to help forecast future sales.
Answer questions related to tax concerns and regulatory issues.
There’s a reason so many entrepreneurs stick to their own personal wheelhouses and outsource their accounting to seasoned pros. But there’s also a comfortable middle ground where AI can tackle some of your daily accounting needs so you can focus on reviewing its output and managing your business' critical or private information.
How Can ChatGPT and Accounting Automation Help CEOs, Founders, Owners, and Finance Professionals
ChatGPT is a valuable finance tool for:
Analyzing tools
Calculating KPIs and providing industry-level benchmarks
Writing a fundraising deck or memo
Evaluating debt options
For CEOs, founders, and owners, this means having the ability to identify key metrics and using that information to woo investors or strategize plans for the next fiscal year.
Those are big tasks, but AI can help with small administrative jobs, too. While they're not true accounting, these tasks often fall to whoever is keeping up the books:
Reviewing vendor/supplier contracts
Evaluating insurance policies
Automate Routine Tasks
Automating routine tasks relieves some of the burden on your workforce, increases efficiency, and reduces the frequency of human error. You might use AI in finance to automate:
Data entry: Input company expenses and have them automatically categorized and sorted by date and/or department.
Invoicing: Automatically generate invoices based on project completion time, send reminders, and update payment statuses.
Generate financial reports: Use data pulled from payroll, sales records, etc., and ask ChatGPT to produce summaries and reports that can be used to compare quarters, identify trends, and track progress.
Enhance Data Analysis
ChatGPT may be labeled a language learning model, but its real strength lies in analysis — taking in large sets of data and identifying trends, anomalies, and insights. Imagine giving ChatGPT your planned budget for 2023 and actual end-of-year performance figures and having it point out the variances and likely reasons for those differences.
You could also use historical data and trends from the food and beverage industry to compile robust financial models that could help you determine how much product you should order to meet predicted consumer demand.
Assist in Document Review
Instead of getting lost in the fine print, feed your contracts and financial statements into ChatGPT and ask it to:
Review legal language for accuracy
Double-check the inclusion of key clauses regarding payment terms, NDAs, and termination conditions
Compare contract versions to spot changes
Cross-check numerical figures for possible math errors
Cross-reference against local laws and regulations to help mitigate risk
Provide Financial Summaries
Using ChatGPT for accounting, such as generating financial summaries, helps reduce the risk of human error and subjectivity. It’s also remarkably quicker, saving hours or even days versus manual report preparation.
With the right prompts, you can have ChatGPT dial in reports to match industry-specific needs and wants, like accounting for inspection costs or calculating federal excise tax for wineries. Continually using these prompts over time also allows for greater consistency and standardization. This is especially valuable if you’re a growing company with multiple locations — share the prompt and every location’s reports can look similar and be easy to compare.
ChatGPT Can’t Replace Finance Pros
For all the positive potential of ChatGPT for accounting processes, there are still a plethora of reasons AI isn’t quite ready to usurp live financial services experts.
It doesn’t understand context. AI works by using the information you give it and scraping data from other sources around the web. While artificial intelligence is getting better at processing and analyzing that data, it can’t draw from real-world environments and resources. It may not grasp that general financial advice doesn’t always apply to CPG and wine-related businesses.
It can’t replace the benefits of professional judgment. Data-backed financial decision-making and AI often go hand in hand, but sometimes, a gut feeling leads to better results than following a plan spit out by a computer. Humans understand the ethical and legal implications of financial decisions far better than AI can.
It’s not always as unbiased or as accurate as we think. ChatGPT’s output depends on the quality of the information it’s provided. If it’s generating reports or making suggestions based on data that’s outdated, biased, incomplete, or erroneous, whatever it creates may essentially be fruit from the poisonous tree.
The best approach is to think of ChatGPT as a tool for augmenting your existing arsenal of accounting software. AI should complement the advice and work of finance professionals, not replace it, and anything created with AI must be reviewed by humans.
Tips to Implement ChatGPT in Your Finance Department
As you incorporate AI into financial management practices, follow these tips to reduce friction during the transition and prevent needless errors.
Decide how you want to use ChatGPT. Identify potential use cases and make a list of your dream ChatGPT integrations.
Start small. There are hundreds of use cases for ChatGPT in finance and accounting, but you shouldn’t try them all out at the same time. Start with the tasks or processes with the most potential and branch out from there.
Review your cybersecurity. Your internal data security measures need to be beyond reproach if you’re sending financial information and other sensitive documentation over the internet.
Training Your Finance Team
Train your finance team to use ChatGPT for accounting just like you’d train them on any new software or process. A combination of hands-on training, online courses, and vendor-led workshops offers the most comprehensive introduction.
Test rounds that encourage the team to practice entering prompts and reviewing ChatGPT output can help identify hiccups and increase familiarity. Discuss drawbacks and potential pitfalls openly. Some models should include flawless data points and prompts. Others should use inaccurate data or faulty contracts to see how ChatGPT reacts — and who on the team catches the errors in ChatGPT’s responses.
Overcoming Implementation Challenges
As enticing as the promise of using ChatGPT for accounting assistance may be, hurdles should be addressed along the way. Employees who are resistant to change or legal or IT departments concerned about privacy and infrastructure should be recognized and involved in ideating solutions.
Many challenges can be prevented simply by being aware of ChatGPT’s limitations and ramping up integration slowly. Others require more specific attention:
Assure your team ChatGPT is meant to assist them, not replace them.
Listen to your tech team about the right way to coordinate integration and backup financial data.
Create processes for cleaning and validating data before it’s handed over to ChatGPT.
Explore expanded data security measures, including advanced encryption, limited access, and regular security audits.
Boost Your Finance Team’s Success With ChatGPT
ChatGPT has gone from zero to hero in record time, but experts believe we’ve still only scratched the surface of AI in finance and accounting. Integrate it carefully and in alignment with your overall financial strategy.
In a world driven by economic decisions, how you choose to build your business could make or break your bottom line. Reach out to Balanced Business Group to see how our personalized financial consulting services and AI-driven solutions can help you optimize your accounting and finance processes.
