What ChatGPT (Re)Taught Me About Balance Sheets & The Dangers of Automation in Business

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If you’re the sort of person who keeps tech at arms length (which I totally understand) you may have not heard about ChatGPT. But then, given the broad application across industries this AI tool is experiencing, it’s highly unlikely this is the first you’re hearing of it. 

Since experiencing the tech boom in the accounting space, I’ve learned that you’re better off embracing change and riding the wave rather than trying to ignore it. So when planning for my marketing content this month, my ghost writer / social media manager / fellow tech nerd Meredith Paige and I decided to see if ChatGPT could assist us.

This month’s topic: the importance of understanding one’s balance sheet. 

Coming into tax time, I thought this would be a great topic for my business clients who have been holding their financial data at a similar distance. 

The results? Interesting, but not in the ways I initially expected.

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How it started

We began with a prompt to indicate my tone of voice, my audience and what I wanted the article to contain:

“Write me a blog article for an accountant who has a tone of voice that is slightly sassy & cheeky. She wants to educate her audience about what Balance Sheets are. She wants to use this article to explain why they are important for business owners to understand, broken down into 3-5 key points. The language should be simple, direct, yet understanding and nurturing.”

The first response to this was far too ‘girl boss’ for my liking. So after playing around with prompts regarding tone of voice, we generated an article that was, to be fair, about 85% ready. Or so I thought.

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Analysis paralysis kicks in. 

The more I read it, the more I wanted to embellish, then simplify, then reword. At first this article had seemed quite accurate, and it had done good justice to the prompts we had given it. 

But after much back and forth with Meredith & I applying our brains to it, it still just didn’t sit right with me. And as the email chain grew longer, I suddenly realised that I had unknowingly run straight into the point I find myself making almost every day:

You can’t rely on automations to think on your behalf.

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Where is this knowledge coming from?

When I asked ChatGPT where it draws its responses to prompts from, this was its response:

“As an AI language model, my responses are generated based on a mixture of licensed data, data created by human trainers, and publicly available data. I have not been directly trained on specific books, articles, or websites. Instead, I've been trained on a diverse range of internet text, including news articles, books, websites, and other written material. It's important to note that while I strive to provide accurate and up-to-date information, my responses may not always reflect the most current news events or developments.”

So it’s learning from what other people have written, researched, published and outlined, and then couched that knowledge in my tone of voice. That is not the same as me expressing my own ideas, in my own tone of voice

Business accounting has become grossly overcomplicated post-tech boom. Where previously, business owners could interpret their own ‘story’ through practical ledgers and manual spreadsheets, we all now feel hopelessly disconnected from data that is meant to be about us in the first place. (This all done with the idea that it’s making our bookkeeping ‘simpler and easier’ - I beg to differ, but that’s a rant for another day). 

I see so much of this in modern business accounting: entrepreneurs struggling to reverse engineer automations within Xero, MYOB, etc. to fit their own story, and wondering why it doesn’t feel quite ‘right’. That invaluable owner's intuition is still tugging at our sleeve saying “there’s something still missing!”

Trying to figure out your financial data through automated reconciliations and default workflows does not equal having a clear understanding of the story of your own business. But guess what CAN help you get a clear understanding of your business today? 

Funny how things come full circle.

Well, well, well - if it isn’t the humble Balance Sheet

It’s ironic that I had to relearn this lesson about automation whilst writing an article about balance sheets, but the universe works in mysterious ways (c’mon, you didn’t think I was gonna let you off without some financial woo-woo, did you?)

Thanks to some thought starters courtesy of ChatGPT, here is what I believe all businesses should know about them:

  1. Put simply: A balance sheet is a financial statement that provides a snapshot of your business's financial position at a specific point in time. It allows you to see what your business makes, owns and owes at a glance. 
  2. Your financial data could be full of junk, inaccuracies and downright incorrect information, giving you mixed messages about where your business is ‘at’. The best place to sort through the laundry pile of information and start getting better organised is your balance sheet. 
  3. If this is your first time looking at it, and something (or a lot of ‘somethings’) don’t seem to add up, it doesn't necessarily mean that it’s a problem with your business. I’ve had clients who have been left to tidy up their own bookkeeping mess after their accountant made changes & corrections to their own records, but left the client’s in a shambles.

The next step

You should be able to look at every single line item on your balance sheet and know what it refers to. If there’s something in there that is unfamiliar, perhaps you don’t recognise or understand it, that’s no cause for panic! But that’s exactly where you need to start asking questions of your bookkeeper or accountant (and don’t let the conversation wrap up until you can explain it back to them!)

Never forget that these are YOUR financial statements. They’re designed to give an elegantly simple summary of your business, so you have the right to question and understand them. 💪

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Need a step before that step?

The idea of diving headfirst into your financial data before booking in a long chat with your accountant might be a bit much for you right now. So let’s take it one step at a time together - book a free introductory chat with me at a time that works for you, and I can support you with a game plan for mastering this aspect of your financial data:

Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 30 minute chat with me: https://betterbusinessdecisions.com.au/ 

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