ChatGPT for accountants

Accounting firms are under immense pressure. Finding talent is challenging, and so is living up to client expectations. Fortunately, the latest advancements in artificial intelligence provide a way to enhance productivity.

Generative AI (GenAI) is a game-changer, offering productivity boosts comparable to the impact of yesteryear’s electronic spreadsheets. I’m already leveraging GenAI chatbots to complete tasks with 50% or greater efficiency—and you can, too! You just need to know how to start.

It’s important to know which tasks AI chatbots are most suitable, because number-crunching is not their strong suit. GenAI chatbots, such as ChatGPT and Claude, excel in language-related tasks. You might think that makes these chatbots unsuitable for accounting, but you’d be wrong. There’s plenty of reading and writing in accounting.

For an industry built on asking and answering questions, GenAI is a game-changer. These chatbots can understand nuanced questions in everyday language and provide highly accurate responses. In addition, they can search the web for information and seamlessly incorporate it into their answers.

Answering repetitive client and team member questions is an obvious application. Document analysis is another clear fit. But the possibilities extend much further. Let’s explore three ways AI chatbots can save time for accountants.

#1: Answering client questions

Here’s an example of how ChatGPT saved me a lot of time by answering a real-life question.

A close friend of mine—let’s call him Mike—sent me a text saying, “I have an accounting question to ask. Lemme know when you have 5 minutes for a call.”

We all know there’s no such thing as a 5-minute accounting question, but I called Mike back. He’s a good friend. What else could I do? Fortunately, Mike wasn’t available.

When Mike returned my call, I was busy, so he left me a voicemail. That’s when I remembered that my iPhone transcribes voicemails—and that gave me an idea.

I copied the voicemail transcript and pasted it into the ChatGPT mobile app. Then I used text-to-speech to prompt ChatGPT: “I’m an accountant and received this question from a friend. This transcript was auto-generated, meaning it might have some spelling and grammar errors. Do your best to interpret it and provide me with an answer.”

The response I received from ChatGPT was well-thought-out and accurate, but it sounded a bit too formal.

So I requested it to make it more conversational, such as a text message to a friend. The result was an answer that I could copy and paste into a text message, and send to my friend.

The entire process took exactly 5 minutes. It might be the first truly 5-minute accounting Q&A in the history of the world!

So try AI the next time you’re asked a common tax question or to explain an accounting concept. Just be sure not to include any personally identifiable information in what you provide to the chatbot, unless you’re confident the terms of service will protect this information to your professional standards.

#2: Analyzing legal documents

Keeping up with important legal and tax developments is crucial, but who has time to pore through lengthy court documents? Enter Claude, an AI assistant skilled at distilling key details from complex court cases.

When the SEC vs. Ripple ruling captured headlines, I asked Claude to summarize the judge’s decision and attached the PDF. In plain English, it explained the judge’s ruling on when XRP is a security and when it’s not, depending on how it is sold.

The executive summary took mere minutes to generate, opposed to the hours it would have consumed to read the full decision. Claude’s summarization included useful analysis, not just the ruling outcome. The well-structured explanation helped inform my perspective, allowing me to discuss the case intelligently on my podcast.

To be sure that Claude wasn’t hallucinating, I quizzed it further on specific parts of its summary and reviewed the relevant sections in the original document. You should do the same: Never blindly trust an AI chatbot. Think of it like a smart intern and always double-check its work.

Next time legal intricacies become unclear, let Claude help you gain clarity. Stay updated on the changing legal landscape that is most relevant to your accounting work. With Claude, you can more easily monitor relevant legal issues to give your clients the best advice. Whether it’s new regulations, tax court cases, or SEC lawsuits shaping the cryptocurrency landscape, Claude speeds up analysis.

#3: Posting transactions in QuickBooks

Another time-consuming task for accountants is figuring out journal entries, especially journal entries for new or unfamiliar transactions. ChatGPT can help.

First, a word of warning. We’re sailing into treacherous waters.

ChatGPT is great at text-based tasks, but struggles to do math operations accurately. The risk of hallucination is high, so you have to be careful. Always check the numbers.

However, ChatGPT can still be a valuable tool to set up the structure of journal entries. It tends to get that right.

Here’s an example:

Suppose a client has sold goods worth $5,000, received cash of $2,000, and the rest is a credit sale. You can ask ChatGPT: “Create a journal entry for the sale of goods worth $5,000, with $2,000 received in cash and the rest on credit.” The bot will provide an entry as follows:

Simple enough. You could have figured this out yourself. But what about recording this in QuickBooks? You shouldn’t use a journal entry to record this transaction.

Let’s see if ChatGPT can tell us what to do. This is something that I anticipate Intuit Assist, the GenAI-powered financial assistant built into QuickBooks, will be able to help with someday as it continues to develop.

In the same conversation window, I asked: “How would I record this transaction in QuickBooks Online?”

ChatGPT correctly advises creating a Sales Receipt for the cash portion and an Invoice for the A/R portion, with detailed steps for each.

But how can I verify that these instructions are correct or what if I’d like to see screenshots? Let’s follow up. I asked, “Can you point me to instructions that tell me in detail to enter the sales receipt and invoice?”

ChatGPT provided detailed instructions for how to enter a sales receipt, but it inadvertently linked to a support article on the QuickBooks website on how to enter an invoice. It then advised incorrectly that it was unable to find detailed instructions on how to create an invoice.

When I pointed out the mistake, ChatGPT corrected itself.

As you can see, ChatGPT is a powerful tool for learning how to use software such as QuickBooks, but you have to be careful. It is a quick way to get answers to questions, but it doesn’t always get the right answer. Be sure to dig in and never take anything at face value when it comes to AI—for now.

Next steps: Give it a try

Integrating AI tools such as GPT-4 powered chatbots into your everyday workflow can revolutionize how you handle tasks, including legal document analysis, accounting queries, or transaction posting in QuickBooks. While these AI assistants are not perfect, they offer a fast and convenient solution for many challenges faced by professionals. However, as we push the boundaries of what AI can achieve, it’s important to remember the significance of verification, especially for complex tasks. Trust, but always verify.

Editor’s note: Blake Oliver recently presented “Harness the Power of AI: Practical Uses for Accountants,” and it is available on demand. Watch it for a more detailed explanation of GenAI and see how Blake incorporated AI into his work. This article was originally published on Firm of the Future.