ChatGPT is a generative AI large language model (LLM) with chatbot tools. ChatGPT for finance somewhat overlaps with ChatGPT for accounting because accounting data is used in financial planning & analysis (FP&A) and other aspects of finance. In organizational structure, accounting falls under finance. The ChatGPT accounting article (first in our series) includes an in-depth explanation of what ChatGPT is and covers the limitations of ChatGPT.
Now and in the future, ChatGPT is becoming even more ubiquitous and efficient, as an embedded feature in accounting and finance for invoice processing, spend management business intelligence, and other AI-driven automation software that streamlines processes.
Can ChatGPT Be Used in Finance?
Yes. Finance management is just one of the many ways to use ChatGPT, an AI-based large language model (LLM) and chatbot. How to use ChatGPT in finance Includes: businesses can create reports, track expenses and budgets, use ChatGPT for financial analysis, cash flow projections, M&A, investments, financing, and making informed financial decisions.
Financial services companies also use ChatGPT. Financial institutions in the finance industry like banks use ChatGPT for customer risk management, customer service, global regulatory compliance, and loan approval evaluation.
How Finance Teams Can Use ChatGPT
12 financial GPT use cases by business finance teams are:
- Financial analysis and decision-support
- Expense management and budgets
- Creating computer code
- Cash flow projections
- Researching financing and investment products
- Researching economic and industry trends with financial impacts
- M&A and corporate development
- Researching tax and globalization strategies
- Creating conference call scripts for investor relations
- Creating ESG goals and reports
- Preparing financial analysis reports for the Board of Directors
- Business communications
1 – Financial Analysis and Decision Support
ChatGPT can analyze financial data, including expenses and financial statements and discern anomalies in the data requiring human investigation and follow-up. Finance can determine the accuracy of any financial analysis created by ChatGPT. Once finance fact checks and refines the ChatGPT output, it may be used for presenting financial advice as suggestions and making decisions within the company. ChatGPT may be used in this way to enhance operational efficiency, growth strategies, and profitability.
2 – Expense Management and Budgets
The finance and accounting team can use ChatGPT to code and track expenditures and business-related employee expenses and manage budgets by analyzing spend. Tipalti, which embeds ChatGPT-4 into its AP automation software, efficiently uses ChatGPT to enhance the accuracy of expense coding during automated supplier invoice processing. Tipalti PI also lets you submit questions through its digital assistant Ask PI (with AI and ChatGPT’s help) to use artificial intelligence in accounts payable and gain business intelligence in real time through Tipalti accounting automation products.
3 – Creating Computer Code
In finance and accounting, you sometimes need to create and use computer code. For example, according to Hector Garcia, CPA in his YouTube video, “Advanced ChatGPT Concepts for Accountants,” you can create Excel macro computer code or computer code in other computer languages that you specify in a ChatGPT request to generate computer code for a particular purpose. After creating the computer code through ChatGPT, copy the code into the program where you need it and follow the required software program steps to use the computer code.
4 – Cash Flow Projections
ChatGPT can be used to help the finance department prepare cash flow projections. The inputs can include up-to-date economic and industry information that you provide. Finance and accounting professionals must ensure the reliability of these projected amounts based on their experience with cash flow projections and refine them to generate better cash flow predictions.
5 – Researching Financing and Investment Products
As the Chief Financial Officer or Treasurer, you may be tasked with selecting financing options and short-term investments. ChatGPT can help you discover and assess the possibilities and prepare a comparison report. Again, be sure to add current information about rates and available products in the ChatGPT input to overcome the ChatGPT time chasm barrier.
6 – Researching Economic and Industry Trends with Financial Impacts
Chat GPT helps you track past and current data on economic and industry trends when you add current information through a PDF file or other data feed source for economic and financial news through a ChatGPT API add-on app. Your ChatGPT research in the area of economic and industry trends will provide information on market data, market trends, economic factors, and potential risks.
With this information, you can gauge financial impacts on your business and respond through proposed new actions and business decision-making. You can also apply this information to the stock market and potential impacts on your company’s and other companies’ stock prices. The stock price application would be useful if your company is publicly traded, is considering acquisitions, researching competitors, or is an investment firm.
7 – M&A and Corporate Development
With ChatGPT, you can research target industries, competitors, and M&A candidates. You can also research valuation techniques used in the industry. After completing the research, you can generate a preliminary report to be finalized by a human member of the corporate development or finance team. ChatGPT in M&A can also be used for due diligence checklists and integration plans, according to Midaxo, an M&A software company.
8 – Researching Tax and Globalization Strategies
As the CFO or a tax professional in a corporation, you’re responsible for optimizing financial performance. Tax implications of domestic and international expansion strategies and changes in tax laws will impact financial results. Therefore, you can contribute to profitability and global regulatory compliance with a better understanding of taxes and global legislation.
9 – Creating Conference Call Scripts for Investor Relations
As a public company CFO or investor relations professional, you may be responsible for developing conference call scripts for the CEO and CFO to present when discussing quarterly financial results. ChatGPT can play a role in helping your business prepare for financial analyst’s questions and participate in the conference call.
10 – Creating ESG Goals and Reports
Companies have begun preparing ESG reports and disclosures for Environmental, Social, and Governance issues. The finance and accounting department may be in charge of preparing these ESG disclosures and reports. ChatGPT can help research ESG.
11 – Preparing Financial Analysis Reports for the Board of Directors
To become a trusted CFO, you must have the respect of your company’s Board of Directors. One way to earn their respect is to become a strategic CFO that presents valuable information and financial analysis to the board in formats that are easy to digest. ChatGPT can be your AI accounting and finance digital assistant for this role. ChatGPT will generate preliminary reports that you will refine for accuracy, added value, and impact.
12 – Business Communications
Finance teams use ChatGPT to write emails and prepare other forms of business communications. You can use ChatGPT for meetings, according to the software company, Tactiq.
For meetings, download the transcript from a recorded video call like Zoom and ask ChatGPT to summarize the meeting, identify decisions to make, provide a list of action items, and write an agenda for the next meeting. Or use a software meeting platform that uses the enterprise API connection from OpenAI to accomplish these meeting tasks as an AI tool, without using the meeting information dataset for any ChatGPT machine learning model training purposes.
How can your business use AI and ChatGPT for finance?
Learn about “Tipalti PI” with embedded AI and ChatGPT for Accounts Payable and Finance Automation.
The Pros and Cons of ChatGPT for Finance
Using ChatGPT for finance has pros and cons.
Pros
- ChatGPT can produce results quickly in the format that you specify
- ChatGPT can generate computer code
- ChatGPT can perform many types of tasks for finance
- ChatGPT can provide insights for expense management and decision-making
Finance professionals and accountants can use ChatGPT-generated computer code without knowing how to program in a specified computer language.
Cons
- ChatGPT was only trained on data through 2021
- OpenAI warns of data privacy and security concerns for ChatGPT
- ChatGPT can produce errors or inaccurate “hallucinations”
- Using ChatGPT may take several attempts to get the output right
To overcome the gap in training data between 2021 and the current year, you need to provide additional inputs to ChatGPT if it is required to achieve an up-to-date answer to your question or task.
Don’t use confidential data in ChatGPT inputs to ensure that company data privacy and security are retained. Use software with enterprise security features if it embeds ChatGPT.
Fact check and edit and rewrite ChatGPT-generated content and reports.
Using ChatGPT alone isn’t always efficient because its effectiveness depends on your prompt engineering expertise and ChatGPT understanding your prompts.
The Future of ChatGPT and Finance
Applications of ChatGPT for finance will continue to expand and evolve. Rather than using ChatGPT exclusively through the ChatGPT computer AI chatbot interface with prompts or Q&A, more software products will access ChatGPT through an API connection. The AI connection combines ChatGPT’s powers with other artificial intelligence/machine learning and robotic process automation (RPA) models, algorithms, and tools. As a large language model that’s part of the natural language processing segment of AI, ChatGPT has limitations when used alone to create finance solutions.
Tipalti has already begun to embed ChatGPT in its products providing finance automation solutions. Tipalti also offers automation software for PO management in procurement. Tipalti software provides enterprise grade security.
Tipalti automation software helps you future-proof your business through AI-driven digital transformation, enhancing employee productivity and contribution to business results. To learn more, download our eBook, “The Human Impact of Digital Transformation in Your Finance Department.”
