A bookkeeper, who should have known better, didn’t like the profit number on the financial statements that she produced. So, instead of asking the owner or someone like me who knows the financial health of the company, she uploaded these confidential statements into ChatGPT.
ChatGPT’s answer was that the company was bankrupt (which it wasn’t) and that it would not be in business much longer.
This bookkeeper went to all the employees and told them to start looking for other jobs since the company was going out of business.
The owner fired her. The company is still not bankrupt over a year later. She was new, didn’t know the industry, and it was a slower month for revenue.
ChatGPT should NEVER be used to analyze financial statements.
Three reasons why:
First, ChatGPT is a text based large language model and is not good with analyzing numbers.
Second, it doesn’t know the trends of the financials. If the company had a slow month, is this typical for this time period? What did the financials look like a month ago, two months ago, etc.?
Are the trends heading in the right direction?
And most important, third, do you really want to upload confidential financial information into a large language model which makes this information public?
Beware!
If you want to ask ChatGPT about the definition of a term, that’s fine.
If you want to ask ChatGPT to analyze your financial statements – you will probably not get an accurate answer and you’re making your confidential financial information public.
To my knowledge, I am the only person worldwide, with the help of our programming team, who has taught AI to read a small business financial statement – and we didn’t use ChatGPT as our large language model.
Small business statements are messy. No two statements look alike. That’s why it took us more than a year to get it right.
ChatGPT, Gemini, and other large language models are great for many things. They are NOT great for analyzing financial statements. Financially Fit Business, the software we developed is (www.financiallyfit.business).
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How financially fit is your business?
Click here to take this one minute assessment.
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This Week’s The Financially Fit Business Podcast:
Implementing Financial Advisory Services – Part 4
In this four-part series I discuss the reasons why to start and how to implement your financial advisory program. In part four I give you ideas on conducting your exploratory meeting with your potential advisory services clients and follow up after the meeting.
Click here to listen
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Books/Audios that could help your business and you
AI Search Revolution describes the next phase of search. Google is no longer enough. If you don’t want to read it, give it to your marketing team and make sure that they are following the suggestions so that your company doesn’t get lost in the AI search world.
Click here to order on Amazon:
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Proven Operations Manuals
- Best Practices to Operate a Profitable Business
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Financial Statements Matter
Written in English rather than accounting babble, discover what your balance sheets and profit and loss statements are really telling you. Make better business decisions based on accurate, timely financial statements.
For Retail businesses: Click Here
For Service businesses: Click Here
For Home based businesses: Click Here
For HVAC and Plumbing businesses: Click Here
For Irrigation/Landscaping businesses: Click Here