Artificial intelligence is rapidly reshaping numerous industries, and ChatGPT is at the forefront of this shift. While some embrace the technology eagerly, others are cautious, particularly in traditional fields like accounting.

So, is ChatGPT for accountants truly impactful? And perhaps an even bigger question—will AI replace accountants in the future? Not exactly. However, it can significantly boost efficiency and accuracy in various accounting tasks.

In this article, we discuss how to use ChatGPT for accounting through practical use cases, highlighting best practices and workarounds.

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Will AI Replace Accountants?

With AI advancements, ChatGPT for accountants seems game-changing, and there’s growing speculation about the future of accounting jobs. But the data suggests that AI will augment rather than replace human accountants.

According to the U.S. Bureau of Labor Statistics (BLS), employment for accountants and auditors is projected to grow 6% from 2021 to 2031, which is about as fast as the average for all occupations. This growth is driven by increasing complexities in financial regulations, corporate taxation, and the global economy—areas where human judgment is critical.

But can ChatGPT do accounting?

While AI tools like ChatGPT can handle routine tasks such as data extraction and financial analysis, they lack the ability to make nuanced decisions, provide strategic advice, or handle complex regulations.

In terms of AI passing prominent financial certifications, the results have been mixed. For instance, when ChatGPT did the CPA exam, it struggled with more advanced sections that require critical thinking and domain expertise. Similarly, in simulations for the CFA exams, ChatGPT performed well on basic financial concepts but fell short in areas that required deeper analysis and ethical judgment.

So, will AI replace accountants?

Not anytime soon. Instead, AI tools like ChatGPT will likely continue to assist accountants by automating repetitive tasks and providing insights that allow professionals to focus on higher-level work, such as strategy, compliance, and advisory services.

Let’s see how to use ChatGPT for accounting and depict four practical use cases.

ChatGPT for Accountants: The Data Extractor

Managing invoices is one of the most common yet essential tasks in accounting. Traditionally, it involves entering data manually, cross-referencing information, and ensuring everything is accurate—a process that can be both time-consuming and error-prone. This is where ChatGPT steps in, simplifying the workflow.

Imagine you have a stack of invoices, and you only want to extract specific information like the invoice number, vendor name, date, due date, and total amount due. In accounting, ChatGPT can streamline this process with just a few instructions.

A simple prompt could be:

“You’re a virtual assistant trained to pull out key details from invoices. Please provide the Invoice Number, Vendor, Date, Due Date, and Total Amount Due.“

Once you upload the invoices, ChatGPT processes the data, allowing you to easily copy it into Excel or export it into a CSV file for future use. This method can save considerable time, particularly when working with large volumes of documents.

Best Practices for Data Extraction

Here are the top five best practices when using ChatGPT for accounting:

  • Always Review Results: While ChatGPT for accounting can accurately extract data, it’s essential to review its outputs to ensure there are no mistakes.
  • Provide Clear Context: When setting up your prompt, be specific about what data you want extracted, including formats (e.g., dates, amounts).
  • Batch Processing: If you have a large number of invoices, consider processing them in smaller batches to minimize the risk of missing or incomplete data.
  • Verify Against Originals: Always cross-reference the AI’s output with the original documents to ensure no critical information is overlooked or misinterpreted, such as ChatGPT-processed invoices.
  • Automate Error Checking: You can also train ChatGPT to flag potential discrepancies, such as incorrect totals or mismatched dates.

ChatGPT for Accountants: The Financial Advisor

What other tasks can I use ChatGPT for in accounting? Its usefulness extends beyond administrative tasks—it can also perform financial analysis. By evaluating historical financial data, it can help identify patterns, highlight changes in key financial metrics, and provide insights to assist accountants in making data-driven decisions.

One of ChatGPT’s use cases extends to calculating critical financial ratios such as liquidity and profitability ratios, offering a clearer picture of a company’s financial health. It can also assist with journal entries, such as recording write-offs or accruals, based on the provided context.

Bonus Insight: Learn accounting and financial statement analysis with our free accounting study notes, explaining key concepts and formulas.

Example: Recording Journal Entries

Can ChatGPT do accounting and financial analysis? Consider the following scenario:

A company has a monthly accrual for doubtful accounts, and as of March 31, 2024, the balance is $150,000. On April 30, 2024, one customer (Lexington Corp.) files for bankruptcy, leaving $30,000 in unpaid invoices. You need to record a journal entry to write off this amount.

You could ask ChatGPT:

“Create a journal entry for writing off $30,000 in accounts receivable for Lexington Corp., based on their bankruptcy filing as of April 30, 2024.”

ChatGPT might respond with the following draft:

  • Debit: Doubtful Accounts Expense $30,000
  • Credit: Accounts Receivable $30,000

This journal entry aligns with proper accounting standards and can be further customized. In practice, ChatGPT and accounting work together to automate repetitive tasks, such as reconciling accounts and generating financial statements, increasing overall efficiency.

Can ChatGPT Do My Taxes?

While ChatGPT for accountants can assist with tax-related queries, it’s important to note that it is not a replacement for professional tax software or a licensed accountant.

Can ChatGPT do my taxes? Technically, it can help you understand basic tax concepts, generate tax-related calculations, and answer common questions about tax forms or deductions, but it lacks the expertise to handle specific and complex tax situations. For accurate tax filing, especially when dealing with detailed tax laws and personalized financial circumstances, it’s still crucial to consult a certified accountant or use specialized tax software.

ChatGPT for Accountants: The Excel Specialist

Excel is a fundamental tool for accountants, but working with complex formulas can sometimes be challenging. In the past, you may have relied on external resources or colleagues to explain or modify complex formulas.

Now, can ChatGPT read Excel files and help simplify this process? Absolutely. It can provide step-by-step explanations of how formulas work and guide you through modifications.

For example, if you have a formula that sums revenue from one region, and you need to include multiple regions, ChatGPT can walk you through the modifications, ensuring the formula meets your updated requirements. It can also help you create new formulas by guiding you through the necessary steps based on your data. This is one of the best ways to use ChatGPT to optimize mundane tasks at work.

Best Practices for Using ChatGPT in Excel

ChatGPT and accounting make learning tools like Excel easier by offering tutorials and explanations. You just need to provide clear, specific information about the data you’re working with. The more context you give, the better the tool will be able to assist you in generating the appropriate formula or output.

In a nutshell, best practices for using ChatGPT and Excel include:

  • Clearly Define Your Data: Always provide a clear description of your data structure (e.g., cell ranges and formats) to get accurate formula assistance.
  • Test in Small Sections: Before applying complex formulas to an entire dataset, test them on a small sample to ensure they perform as expected.
  • Iterative Refinement: This is a key practical application of ChatGPT for accountants. If the first response doesn’t meet your needs, refine your prompts with additional context to get a better output.
  • Cross-Check Outputs: While ChatGPT is good at explaining formulas, always cross-check its recommendations to ensure no errors in logic or calculations.
  • Ask for Variations: If you’re unsure which formula works best, ask ChatGPT to suggest different methods for achieving the same result, such as using alternative functions.

ChatGPT for Accountants: The Email Copywriter

Accounting involves not only managing numbers but also communicating with clients, colleagues, and vendors. Among the practical applications of ChatGPT for accountants is professional copywriting. It can help streamline this communication by drafting professional emails in a fraction of the time it would take you to compose one manually.

Whether you’re answering client queries, explaining financial reports, or coordinating with team members, ChatGPT can generate clear and concise emails that maintain a professional tone. You can tailor the tone and style of the message by providing specific instructions on how you’d like the email to sound.

Example: Refining a Frustrated Email

Let’s say you need to follow up on overdue invoices but want to avoid sounding frustrated. In ChatGPT, an accountant could draft a message like:

“Hey John, I’ve reminded you about the missing invoices multiple times. We can’t proceed without them. Please send them ASAP.”

It can draft professional emails to clients and colleagues, ensuring clear, concise, and effective communication. And here’s a ChatGPT prompt for accountants, “Could you please rewrite this email in a friendly and professional tone?”

In response, you get your message into a polished, courteous email, such as:

“Hi John, I hope you’re doing well. I wanted to kindly follow up regarding the outstanding invoices. We need them to proceed with the next steps. Could you please provide them at your earliest convenience? Your prompt attention to this matter is greatly appreciated.“

Among the practical uses of ChatGPT for accountants, drafting professional emails to clients and colleagues may save time and ensure clear, professional communication.

What Not to Do with ChatGPT

While ChatGPT is an excellent resource, there are some best practices and limitations to keep in mind to use it responsibly in the accounting field:

1. Protect Sensitive Data

Never use sensitive or confidential data. AI tools cannot distinguish between private and public information. ChatGPT use cases in accounting can greatly enhance efficiency, but it’s crucial to ensure that sensitive information is protected by anonymizing or de-identifying data before use.

2. Don’t Rely Solely on AI

While ChatGPT can handle many tasks efficiently, it’s important to remember that it’s not perfect. Always verify the outputs it generates, especially when dealing with financial data, and ensure all information is accurate before applying it.

3. Avoid Using It for Complex Decision-Making

Will ChatGPT replace accountants? No, it won’t. It is excellent for processing data and suggesting options but nuanced decision-making still requires in-depth human judgment.

4. Limit Its Role in Compliance and Audits

In ChatGPT, an accountant can get assistance with financial analysis, it’s best not to use it for tasks requiring compliance or regulatory reporting. Human oversight is critical in these areas to avoid legal risks.

5. Be Mindful of Over-Automation

ChatGPT use cases in accounting are plenty, but over-reliance on routine tasks could lead to overlooking important details that require critical thinking or a human touch. Balance automation with manual checks and reviews.

Watch Now: Our YouTube video talks about these four practical applications of ChatGPT for accountant in more detail, giving more examples and prompt ideas.

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FAQs

Can ChatGPT be used for accounting?

Yes, ChatGPT can assist accountants with tasks such as data extraction, financial analysis, drafting emails, and even helping with Excel formulas. However, it should not be relied upon exclusively, as human oversight is still crucial for accuracy.

How are accountants using ChatGPT with Excel?

Accountants use ChatGPT to understand and modify complex Excel formulas. It can also help generate new formulas or automate repetitive tasks by providing clear instructions based on your data.

How accurate is ChatGPT in accounting?

ChatGPT is highly effective for routine tasks like data extraction, financial analysis, and generating content. However, it may make mistakes, so always verify its outputs, especially when dealing with financial data or legal matters.

Did ChatGPT pass the CPA exam?

As of now, ChatGPT has not passed the entire CPA exam—just parts of it. While it can assist in understanding accounting concepts, human accountants must meet educational and certification requirements to pass professional exams like the CPA.