Best ChatGPT Prompts For Accountants in 2024

Best ChatGPT Prompts For Accountants in 2024

Artificial intelligence (AI) has solidified its presence in everyday life, disrupting several industries and creating new opportunities for workers to streamline workflow. Cutting-edge generative AI models like ChatGPT sit at the forefront of this innovation, making their way into even seemingly complex industries such as Accountancy.

If you’re an accountant looking for the best way to use ChatGPT to reduce your workload and optimize productivity, then you will find this article really helpful. Readers will learn how to use ChatGPT to streamline work and the best prompts for accountants.

First, we look at some niches within the accounting industry where ChatGPT can prove an invaluable tool.

How ChatGPT Can Help Accountants Streamline Their Work

Accountancy is a professional field that encompasses multiple economic-based tasks. They include analyzing, collecting, recording, sorting, and summarizing financial records. Covering these tasks is often time-consuming and exhausting.

ChatGPT, a generative text-based AI model developed by tech startup OpenAI, has shown itself to be a valuable tool that can help accountants, bookkeepers, financial officers, and other individuals in the accountancy field to streamline their work. Trained on thousands of datasets, the AI system positions itself as a game-changing technology that redefines how workers in the accountancy field can streamline their work experience.

Accountants can use the text-based AI model to perform recurring tasks, such as data entry, preparing financial statements, drafting professional emails, reconciliation, invoicing, and billing. ChatGPT is also a great tool to automate data analysis, making the accountant’s work faster and more accurate.

Financial workers can also stay up-to-date with globally accepted financial procedures and standards using ChatGPT. They can equally receive education from the generative AI model on unclear matters relating to their field of study.

Having recognized how ChatGPT can help accountants streamline their work, it is important to discuss how to input prompts into the system to get relevant and accurate outputs. An AI prompt is the communication channel between a user and an AI model that allows the user to input what they want the system to accomplish.

The following three subheadings discuss how tax professionals, accountants, and bookkeepers can use ChatGPT prompts to upscale their workflow.

How to Use ChatGPT Prompts for Accounting and Bookkeeping

Accounting and bookkeeping generally encompass the processing and keeping of financial records for individuals, businesses, and corporations. As discussed earlier, covering the activities in this field can be time-consuming and stressful.

With ChatGPT, the work becomes easier and faster. Here are factors accountants and bookkeepers will keep in mind while preparing accountancy-based prompts to communicate with the text-based AI model:

• Use Clear Prompts

Unlike human communication, where general terms and questions are helpful, communicating with AI models requires being clear and specific to get the desired result. So instead of asking general questions like “Tell me about accounting,” the user can ask direct questions like “Tell me the key principles of double-entry accounting.”

• Request Step-by-Step Guidance

Certain accounting and bookkeeping tasks involve a step-by-step procedure. With ChatGPT, the user can input prompts requesting step-by-step guidance to accomplish a specific task. For example, a prompt can be: “Show a step-by-step process to reconcile bank statements or record depreciation.”

• Refine Prompts

There are occasions when the AI model will generate outputs that don’t match the user’s expectations. Prompts can be refined or edited to obtain more precise information. Such refinement is especially needed when the user is working with a specific accounting-based context.

• Verify Generated Output

Although the text-based AI model produces correct information in most cases, it hallucinates sometimes, generating wrong information as output. The chatbot may also generate outdated information due to a lack of updated data within its system. To avoid falling victim to any of these problems, users are urged to verify outputs by contrasting them with the latest information or meeting a field expert.

• Be Security Conscious

Accountants and bookkeepers deal with clients’ financial data, which may be highly confidential. Since ChatGPT is an AI model managed by an organization, users must treat inputted data as non-private and should not submit sensitive data to the system.

Examples of ChatGPT Prompts for Accountants and Bookkeepers

Here are sample ChatGPT prompts for accountants and bookkeepers:

• Payroll Workflow Template

Prompt: Create a concise monthly payroll checklist template for a client.

Output:

• Quarterly Financial Report

Prompt: Create a concise quarterly financial report checklist for a client.

Output:

• Monthly Bookkeeping

Prompt: Create a monthly bookkeeping checklist.

Output:

Examples of ChatGPT Prompts for Tax Professionals

A tax professional is any individual who has the skills, experience, and qualifications to assist people with their tax preparation. The job includes preparing and filing tax returns, offering tax planning advice, and assisting individuals and businesses to understand and comply with tax laws or manage their tax liabilities.

Tax professionals also play the roles of tax attorneys, enrolled agents, certified public accountants (CPAs), and other tax-focused careers.

Here are some examples of the best ChatGPT prompts for tax professionals:

• Determining Tax Liability

Tax liability is the total amount an individual, a business, or entity owes the Internal Revenue Service (IRS). This organization collects federal taxes and administers the tax laws. These tax liabilities come from the income tax, capital gains tax, self-employment tax, sales tax, and other revenue streams due for payment at the end of the tax year.

With OpenAI’s text-based AI model, tax professionals can determine the tax liability of any client and make their work seamless.

Prompt: Explain to me within 150 words how I can determine my client’s tax liability.

Output:

• Calculating Adjusted Gross Income

Adjusted Gross Income (AGI) involves subtracting specific deductions from a taxpayer’s total gross income. The IRS uses the AGI to determine how much income tax an individual or firm owes. Tax professionals also use the AGI to determine their client’s taxes, eligibility for tax credits, and other deductions to their total tax bills.

As shown in the example below, ChatGPT makes the calculation easy.

Prompt: As a tax professional, help me calculate my client’s adjusted gross income.

Output:

• Calculating Above-the-Line Deduction

An above-the-line deduction is the reduction of a taxpayer’s gross income. The IRS allows taxpayers to downsize the amount subject to federal income taxes through this mechanism. Common above-the-line deductions include alimony payments, student loan interest payments, teachers’ expenses, contributions to a health savings account (HSA), and more.

Regardless of the above-the-line deduction applicable to their clients, tax professionals can harness the prowess of the generative AI model to calculate the reduction.

Prompt: How can I subtract above-the-line deductions from my client’s tax data?

Output:

• Calculating Standard Deduction or Itemized Deduction

The standard deduction is the portion of a taxpayer’s income not subjected to taxation. Factors that affect the standard deduction are the citizen’s age, disability, filing status, and others.

An itemized deduction is a specific expense that enables taxpayers to downsize their taxable income due to particular personal expenses. Taxpayers can benefit from itemizing deductions if they have very large unreimbursed medical expenses or mortgage interest compared to their total income. They can also benefit when they carry out large expenses like charitable donations.

Prompt: Determine my client’s standard deduction or itemized deductions.

Output:

• Handling Tax Refunds

Tax refunds are tax reimbursements to taxpayers who overpaid their taxes in the previous year. Citizens eligible for a refundable tax credit, like a child tax credit, adoption credit, earned interest tax credit, retirement savings credit, lifetime learning credit, and others, can qualify for tax refunds.

Prompt: How should I advise my client to handle their U.S. tax refunds?

Output:

ChatGPT Limitations

While ChatGPT has shown itself to be a powerful tool that can take the accountancy field to the next efficiency level, the AI model has limitations. Here are some common downsides of the popular AI chatbot:

• Language Barrier

ChatGPT understands over 110 languages, making it a valuable tool to users in several locations globally. However, it does not understand many other languages, limiting its usability to individuals communicating with these unsupported languages. The AI chatbot may also find it difficult to understand nuanced languages or ambiguous prompts.

• No Personalized Information

Accountancy often deals with individuals’, businesses’, or corporations’ numbers, dates, and other personalized data. ChatGPT cannot make outputs on certain prompts unless it is fed these data. However, users must not submit sensitive client data to the AI model since it is a public tool and is supervised by a different organization.

• Limitation on Accountancy Knowledge

As sophisticated as ChaGPT is, it lacks knowledge of certain accountancy procedures and regulations, especially if they have been newly revised. The generative AI model does not replace a professional in the field. Instead, it compliments them by supporting users with general information.

• Limited to Text-Based Interaction

Accountants often use charts, images, and financial documents to relay information to clients and other financial experts. With ChatGPT limited to text-based interaction, it becomes difficult for the chatbot to interact seamlessly with the user.

In September 2023, OpenAI announced the addition of image capabilities. The functionality allows users to submit images to the AI model and receive a text-based output. However, the feature is open only to premium users.

Conclusion

This article has discussed how employees in the accounting field can harness the capabilities of ChatGPT to streamline their workflow. The article also highlighted the factors accounting experts will remember when interacting with the AI model. Several examples showing how accountants, bookkeepers, and tax professionals can input prompts into the AI model were also mentioned.

ChatGPT’s limitations have been pointed out to help users get the most out of their AI interaction.

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