I finally uploaded our company’s P&L and Balance Sheet into ChatGPT.  I did it for a couple of reasons.  We have already used ChatGPT to create legal documents and save a lot of money and I was wondering what sort of accounting advice I could get from ChatGPT.  We had a great accountant about 10 years ago – since then the best we have been able to do is find a good compliance accountant.  After working with 4 different accountants during that period, we couldn’t find someone like our original accountant, Jason, who understood accounting, was proactive and cared about the money like it was his own money.  Getting the wrong accountant has cost us over $150,000 (at least, that we can count, possibly more!!)  Having Jason, a great accountant, brought in a lot more than that, so we are keen to see if ChatGPT can provide us with the advice that we used to be able to get.

Data Privacy and ChatGPT

Before we start looking at uploading your sensitive data.  With ChatGPT 4, you can turn off the Chat history, and that means that the data will not be used for training the data set.  I still wouldn’t be uploading sensitive data into an AI machine yet.  I wouldn’t be uploading our receivables at the moment because I don’t want our competitors knowing who our customers are and how much they owe us.

The P&L and Balance Sheet are a bit different.  We run a relatively profitable IT company, we don’t charge exorbitant prices.  To be honest, if we were listed, the P&L would be publicly available, so I don’t think there is much danger in the P&L being exposed.  We share it internally with our team each six months anyway.

 

 

Prompt engineering to get ChatGPT to analyse our P&L

ChatGPT 4.0 makes it easy to upload files.  This is the prompt that I used after thinking about what I wanted.

Here is the P&L for 5 years of an IT-managed services provider in regional Victoria, Australia. As a professional accountant experienced in Small and Medium-sized enterprise consulting, provide commentary on the P&L, conduct ratio analysis using the 20 most commonly used ratios and provide feedback on 5 good points about the P&L and 5 issues that need to be worked on.

I’ve used a little bit of prompt engineering to get the best results.

Steps for successful prompt engineering with ChatGPT.

• I have told it what data I am uploading.
• I have given it context to how I want the data analysed.
• I have told it exactly what I want.

The end result was mixed, although ChatGPT commented in the increasing profits, increasing revenue, ability to control costs and the diverse income streams.  This is a better analysis than I have received from any of the accountants that I have worked with in the last 10 years!  There is still work to be done with ChatGPT before it can take over, but with the pace that AI is improving, I do not think it will be far off.

Will ChatGPT be the death of Accountants?

Even though my experience was mixed, I think the answer is yes.  I received more in-depth analysis and advice than I have received in the last 10 years.

Will all accountants go?  No, there will still be a place for compliance accountants, but we think as companies like Xero start to embed AI into their platforms, much of that work will go.

How will the work of accountants change?  I think there will need to be a focus on providing more advice and less compliance.  There is nothing new in this, but from our experience, a lot of accountants a much more comfortable doing compliance accounting and not value-adding.

Which accountants will benefit from ChatGPT?  The accountants who will benefit most will embrace AI to decrease the repetitive work and use the freed up time to build relationships and understand their customers’ businesses.  That relationship will be were the real value will be and ChatGPT will help a lot of accountants to spend more time in this area of their business.