As an accountant, your work involves analyzing financial data, preparing tax returns, auditing financial statements, and advising clients on important financial decisions. While technology has streamlined many accounting tasks, there is still room for improvement.
ChatGPT, an AI assistant created by OpenAI, can be a powerful tool for accountants. By using targeted prompts for accountants, you can generate detailed reports, analyze scenarios, and get instant answers to your clients’ questions.
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Prompt #1: Tax Return Analysis
This prompt is useful for analyzing a client’s tax return and identifying any red flags or opportunities for savings. The prompt should include the client’s personal details like income, deductions, credits, etc. It can then analyze the return and provide a written summary of key findings and recommendations. For example:
[Client’s personal and financial details]
Please analyze this tax return and provide a written summary of any items that may require further review or could present opportunities for tax savings. Suggestions for deductions the client may be missing out on or credits they could claim would also be helpful.
Prompt #2: Cash Flow Analysis
Cash flow is crucial for business owners to understand. This prompt analyzes a company’s income statement, balance sheet, and other key financial data to generate a written cash flow analysis. Details to include are the company name, industry, income/expense figures, asset/liability amounts, and the period of analysis (e.g. past year, next year, etc.). For example:
[Company name and brief overview]
Please analyze the attached income statement and balance sheet to produce a written cash flow analysis for the past year. Your analysis should identify sources of cash inflow and outflow, changes in working capital, and the company’s overall cash flow over the period. Suggestions for improving cash flow would also be appreciated.
Prompt #3: Tax Planning Scenarios
Use this prompt to model different tax planning scenarios for a client. Provide variables that can be changed like income amounts, deductions, filing status, etc. The AI will then calculate and compare the client’s tax liability under each scenario. This helps identify the most tax-efficient options. For example:
Please model the following tax planning scenarios for a married couple filing jointly with 2 children and $150,000 in total income:
Scenario 1: Standard deduction of $25,000 with no other itemized deductions Scenario
2: Itemizing deductions of $30,000 including mortgage interest and property taxes
Scenario 3: Same as Scenario 2 but contributing $5,000 to retirement accounts
Calculate and compare the tax liability for each scenario. Also suggest any other tax planning strategies that could further reduce their taxes.
Prompt #4: Financial Statement Analysis
This prompt provides an in-depth analysis of a company’s financial statements to assess financial health and identify trends. Key details to include are the company name, industry, and attached income statements, balance sheets, and cash flow statements for the last 3 years. For example:
[Company overview]
Please analyze the attached income statements, balance sheets, and cash flow statements for XYZ Company for the years 2019, 2020, and 2021. Your written analysis should assess profitability, liquidity, leverage, cash flow adequacy, and operating efficiency. Identify any trends over the 3-year period and make recommendations on how the company can improve its financial position.
Prompt #5: Audit Procedures
For auditing clients, this prompt lists out specific audit procedures to test for a particular account, transaction, or assertion. The AI will then provide sample documentation of performing the procedures and documenting the results. This is useful for planning and executing audits more efficiently. For example:
Please provide sample documentation for the following audit procedures related to XYZ Company for the year ended December 31, 2021:
- Inventory existence – perform physical inventory count at year-end and reconcile to general ledger
- Cash receipts – trace a sample of cash receipts near year-end to bank statements
- Accounts payable – confirm a sample of AP balances with vendors as of year-end
Include samples of workpapers documenting the procedures performed and results.
Prompt #6: Financial Projections
Financial projections are important for planning, budgeting and determining financing needs. This prompt models multi-year income statements, balance sheets, and cash flow statements based on assumptions you provide. Key details to include are the company overview, assumptions for revenue growth, operating expenses, capital expenditures, etc. The AI will then generate 3-5 year financial projections. For example:
[Company overview]
Please generate 3-year projected financial statements (income statement, balance sheet, cash flow statement) for XYZ Company based on the following assumptions:
- Revenue to grow 15% annually
- Cost of goods sold is 50% of revenue
- Operating expenses increase 10% per year
- $100k capital expenditure in Year 1 for new equipment
Include all projected figures and notes on assumptions.
Prompt #7: Advisory Memo
Use this prompt when you need the AI to synthesize information from a client meeting or case and provide a written advisory memo. The prompt should include any relevant details discussed along with the issue/question that needs to be addressed. For example:
I just met with John Doe, owner of a small landscaping business. Key discussion points:
- Revenue has doubled in the last 2 years but profits seem flat
- Thinking of expanding to a new city but concerned about cash flow
- Has 2 employees and wonders about benefits vs independent contractors
Please provide a written advisory memo addressing the following question: What steps should John take over the next 6-12 months to improve profits and prepare for expansion? Include specific recommendations related to costs, processes, financing options, hiring, etc.
Prompt #8: Ratio Analysis
Ratio analysis is a useful way to evaluate companies and identify issues or opportunities. This prompt calculates common financial ratios based on a company’s financials. Key details to include are the company name, industry, and attached income statement and balance sheet for the period being analyzed. For example:
[Company overview]
Please calculate and analyze the following financial ratios for XYZ Company based on the attached 2021 income statement and year-end balance sheet:
- Current ratio
- Quick ratio
- Debt-to-equity
- Profit margin
- Return on assets
- Inventory turnover
Include the calculations and an interpretation of each ratio result in the context of the company and its industry peers. Suggest areas for improvement if ratios fall outside of industry norms.
Prompt #9: Research Report
When researching an industry, company or accounting issue, this prompt synthesizes research from various sources into a cohesive written report. Provide relevant search terms, questions to address, and a list of credible sources to gather data from. For example:
Please provide a research report on the top tax planning strategies for real estate investors in 2023. Your report should address the following questions:
- What are the most commonly used structures like LLCs, partnerships, etc. and their tax implications?
- What deductions can real estate investors take advantage of like depreciation, repairs, travel expenses?
- How do 1031 exchanges work and when are they beneficial?
Gather information from sources like the IRS website, accounting journals, and reputable tax advisory firms. Synthesize the research into a 5-paragraph report with an introduction, body, and conclusion.
Prompt #10: FAQ Document
FAQ documents are useful for providing clients with answers to common questions. This prompt structures research and client discussions into an organized FAQ format. Provide a list of 10-20 relevant questions on the topic along with blank spaces for the AI to insert well-written answers. For example:
Small Business Accounting FAQs
Q1: What accounting software is best for a small business? [Answer]
Q2: How often should I do bookkeeping? [Answer]
Q3: What financial statements do I need to prepare? [Answer]
Q4: What are some common small business deductions? [Answer]
Q5: How do I calculate my quarterly estimated tax payments? [Answer]
[And so on for 10-20 questions]
Conclusion
As you can see, ChatGPT prompts provide an efficient way for accountants to generate detailed analyses, model scenarios, research issues, and communicate with clients. By guiding the AI with targeted prompts, you can streamline workflows and deliver higher value services. I hope these sample prompts give you ideas on how to leverage ChatGPT’s capabilities for your accounting needs.
FAQs
Can I modify these prompts for my specific needs?
Yes, the prompts are meant to be used as templates that you customize with your own details like company names, financial figures, questions to address, and so on. Feel free to modify any part of the prompts.
How accurate is the information generated by ChatGPT?
As an AI system, ChatGPT’s responses are based on its training rather than perfect knowledge. While it aims to provide helpful information to prompts, users should verify any important details, figures, or advice generated before relying on them. An accountant’s professional expertise and judgment is still required.
Leon Torres is a data scientist and AI prompt expert dedicated to simplifying complex AI concepts for everyday users. With a background in computer science and a passion for innovation, Leon provides valuable tips and tricks for leveraging AI prompts to maximize productivity and creativity. Leon’s articles are a go-to resource for anyone looking to dive into the world of AI.