The generative AI tool, ChatGPT, has over 100 million users as of June 2023, according to DemandSage.
This article identifies several uses of ChatGPT in accounting that may improve your business productivity. You can perform accounting tasks, brainstorm, research, analyze financial information for insights and decision-making, and gain digital assistance in business communications with human oversight. You can also read our ChatGPT for finance article.
What is ChatGPT?
ChatGPT is a generative AI large language model (LLM) from the company OpenAI for conversational AI chats with inputs and outputs or uses as an automated AI tool. ChatGPT uses natural language processing (NLP) and a transformer multi-layered deep learning neural network (part of the machine learning subset of artificial intelligence).
With ChatGPT, a user enters prompts or questions to generate human-like text, images, audio, or other output from ChatGPT when it will answer questions as conversational AI. Software apps can access ChatGPT through API integration to add ChatGPT functionality to computer programs.
Current Limitations of ChatGPT
ChatGPT is only as good as its inputs, as determined by your level of prompt engineering skills. ChatGPT isn’t fully perfected yet, requiring human judgment, fact-checking, and modifications to its output through iterative refinement of input questions, prompts, and data, including context, tone, and style. You shouldn’t enter sensitive information into ChatGPT, as OpenAI warns because privacy and security are an issue.
In 2023, ChatGPT has only trained on vast amounts of Internet, books, and other training data through the date in the year 2021. It’s possible to add narrow segments of current relevant Internet information as a prompt in GPT to provide more recent information.
How to Effectively Use ChatGPT for Accounting
Although this list isn’t all-inclusive, here are 12 ways to consider how ChatGPT can be used effectively by human accountants for accounting.
12 ways to use ChatGPT for accounting are:
- Invoice processing
- Coding expenses
- Data cleansing
- Formatting output
- Report narratives and notes
- Generating computer code
- Data analysis for decision-making
- Business plan and pitch deck research
- Preliminary financial forecasts and budgets
- Audits
- Tax and legislation compliance research
- Business communications and brainstorming
Some of these practical ChatGPT accounting ideas are from these two YouTube videos by Hector Garcia, CPA: “ChatGPT for Accountants 101 & Practical Examples” and “Advanced ChatGPT Concepts for Accountants.” If you view these videos, you’ll see a hands-on demo of how to use ChatGPT for accounting.
Other ideas are from Tipalti’s adoption of embedded ChatGPT-4 features in its AP automation software for automated invoice processing and data analysis, applying artificial intelligence in accounts payable.
Tipalti’s Ask Pi Feature Example
Combining AI-driven payables and finance automation software with ChatGPT may be the best ultimate solution for achieving productivity gains in some ChatGPT accounting use cases.
How can your business easily and effectively use ChatGPT for accounting?
Read about “Tipalti Pi,” an AI-powered payables intelligence engine, to learn about AI and machine learning for accounts payable and finance automation.
Use end-to-end AP automation software with ChatGPT-enhanced features for advanced invoice processing workflow, auto coding for invoices and PO management (for Procurement and electronic invoice matching), and Ask Pi, an AI-powered digital assistant for instant financial insights and spend analytic.
1 – Invoice Processing
You may be able to use ChatGPT alone for some aspects of invoice processing like coding expenses, but it’s not as efficient or accurate as using Tipalti AP automation software with ChatGPT features.
Tipalti’s AP automation software for end-to-end payables and automated invoice processing, including global payments, incorporates useful ChatGPT features within its software. Within invoice processing, these ChatGPT features enhance account coding prediction for auto-coding and improve purchase order matching. They also enhance Tipalti’s Ask PI, an AI-driven digital assistant. Tipalti is add-on software that integrates with your ERP or accounting software.
2 – Coding Expenses
Again, ChatGPT alone lets you try to properly code accounting expenses to the correct account in your chart of accounts. But it’s not that accurate, and it may take you several tries to get it right.
Instead, use Tipalti AP automation software with built-in ChatGPT and AI-based automatic coding features for supplier invoices in accounts payable. You can combine Tipalti AP software with Tipalti Expenses to gain employee expense reimbursement functionality with account coding of expenses. Tipalti accounting automation is a type of digital transformation, eliminating manual data entry and paper documents, that helps you support your employees through the process.
Tipalti uses robotic process automation (RPA) to automate repetitive tasks. The Tipalti software uses thousands of algorithmic rules for detecting exceptions in digitally captured supplier invoice data prior to payment. Tipalti AP automation software eliminates time-consuming paper and manual processes. This additional functionality will help your company be more efficient, reduce payment errors by 66%, strengthen financial controls, reduce fraud risk, and achieve cost savings. Tipalti saves you 80% of the time for completing your payables processes, and its ChatGPT features add efficiency.
3 – Data Cleansing
ChatGPT can be used to clean accounting data such as customer names to remove unnecessary characters such as numbers and eliminate duplicate names in spreadsheets or the customer master file of your accounting software.
4 – Formatting Output
If you don’t like the way that your accounting software or ERP system formats financial statements or reports, you can reformat them using ChatGPT file inputs and prompts. Besides financial statements and reports, you can use ChatGPT for formatting tables and generating CSV files (for imports or other uses in spreadsheets or computer software programs).
Currently, ChatGPT, which uses natural language processing (NLP) in a large language model (LLM) isn’t sophisticated or accurate enough to produce the financial statements from transactions alone as output. Your accounting software or ERP system is designed for this purpose.
5 – Report Narratives and Notes
Use ChatGPT to add narratives and notes to financial reports and financial statements. ChatGPT can analyze significant increases or decreases in account balances on the balance sheet or income statement revenue, expenses, and profitability for comparative accounting periods.
ChatGPT can add suggestions for how to improve profitability in less formal or internal reports. You can specify to ChatGPT whether you want a short answer or a longer answer within a specified number of characters.
If you use ChatGPT to prepare formal Notes to Financial Statements in accordance with GAAP or other accounting standards, you must fact-check them and ensure that you supplement the information (provided to ChatGPT as input) to include the latest applicable GAAP standards (or IFRS standards, if applicable).
As a public company CFO, you and the CEO have an investor relations and financial analyst liaison role. This role includes planning and participating in quarterly conference calls when financial results are released and discussed. ChatGPT can help you analyze your business and financial results and prepare conference call scripts. You can also ask ChatGPT questions that may help you prepare for anticipated participating financial analysts’ questions before the conference call.
6 – Generating Computer Code
ChatGPT creates computer code in the computer language that you specify. For example, you can ask it to create JavaScript, Python, R, or Excel macro code for a particular purpose. If the code isn’t working or needs revision due to errors or other reasons, you can ask ChatGPT to revise the code based on the problems that you’re encountering. After ChatGPT creates the code, copy and paste it into the application where it’s needed and follow any extra steps to accomplish your purpose.
7 – Data Analysis for Decision-Making
ChatGPT can analyze financial data and accounting information to detect suspected anomalies in trends, amounts, or percentage changes requiring further analysis. You can use this insightful information for decision-making. For example, a ChatGPT financial analysis may point out opportunities for operational improvements resulting in cost reductions that would improve business profitability.
With Tipalti’s built-in ChatGPT features, you can use its digital assistant, Ask Pi, to help your business get real-time financial data insights and spend analysis.
8 – Business Plan and Pitch Deck Research
To prepare a business plan document or related pitch deck, you’ll need to perform extensive research. ChatGPT can perform preliminary research that you’ll fact-check. Remember to provide up-to-date information updates to ChatGPT as input with adequate, prompt engineering. ChatGPT can’t currently prepare PowerPoint presentations, but it can help you brainstorm ideas and generate some text or images to use in your presentation.
9 – Preliminary Financial Forecasts and Budgets
ChatGPT can be used to make preliminary predictions about demand and make financial forecasts and budgets. But it’s not accurate enough to do this on its own. You can use your own judgment and information to adjust and improve these very preliminary financial forecasts and budgets.
10 – Audits
In external audits by CPA firms, an analytic review is one process that looks for anomalies in changes in financial data. ChatGPT can help analyze financial data as an auditing aid. You may be aware of other ChatGPT applications in an audit. As audit automation programs incorporate ChatGPT through the API connection, using ChatGPT features will become easier and more productive in the audit use case for public accounting firms.
To lessen audit fees, clients often prepare and provide general ledger account reconciliation schedules to the auditors. ChatGPT may help business accounting professionals from the company under audit prepare these schedules.
11 – Tax and Legislation Compliance Research
Although ChatGPT isn’t currently ready to prepare accurate tax returns, it’s useful for doing tax research. If legislation, such as a tax law or another type of government legislation, is introduced or already effective, you can use ChatGPT to summarize the legislation. This legislation analysis process may require using a PDF document with the lengthy legislation content as input for ChatGPT.
With a ChatGPT Plus subscription, you can use an app like MyAskAI.com to import PDF files, including IRS instructions or pamphlets, to ChatGPT through their API as input (as demonstrated by Hector Garcia, CPA in his Advanced ChatGPT video on YouTube). This lets ChatGPT use recent Internet-based information for answers to your question(s).
12 – Business Communications and Brainstorming
You can use ChatGPT for brainstorming ideas and to create emails, reports, and other business communications. Give ChatGPT prompts about your writing style, context, tone, and other information required. Check each suggested content communication for accuracy and ask for revisions to improve it. You can also use an editing bot to make the content more concise or detect changes that would improve the content.
CPAs in public practice can use ChatGPT for practice management. Accountants in the industry can use ChatGPT in their departmental or financial management roles in the company.
If you don’t use ChatGPT directly for creating or editing business communications, note that GrammarlyGO is a new AI tool using ChatGPT that the software company Grammarly introduced in 2023. You may find other applications that are also ready to use for business communications.
The Future of AI and Accounting
AI accounting is part of the present and future of accounting and digital transformation for the accounting profession. The impact that ChatGPT will have on accounting is immense. In the future, AI models, including ChatGPT, will be added as embedded features in even more software programs, and new reliable use cases will be discovered.
For example, on June 29, 2023, Intuit established a partnership with OpenAI to use ChatGPT-3.5 and GPT-4 combined with its proprietary GenOS large language model (LLM) in its software products and Fintech businesses “to rapidly build secure, intelligent, personalized GenAI-powered experiences.” Intuit owns TurboTax, QuickBooks, Credit Karma, and Mailchimp. As ChatGPT evolves, it may eventually be used as part of the technology to prepare financial statements and tax returns.
Automation is Finance’s greatest asset. AI and ChatGPT are already being used in automation software for accounting and finance, where Tipalti is at the forefront of change, letting you future-proof your business as it scales with growth. Download our eBook, “The Human Impact of Digital Transformation in Your Finance Department.”
