Can Artificial Intelligence or ChatGPT Be Your Accountant?
Over the last couple of years, artificial intelligence (AI), like ChatGPT, has become a huge phenomenon. Businesses everywhere are using it in different ways. At Blue Rocket Accounting, we use ChatGPT too—for writing letters, emails, social media posts, blogs, and more. It’s incredibly helpful.
But the big question is: can it replace your accountant’s expertise? Let's dive in.
What Is ChatGPT and Artificial Intelligence?
ChatGPT is a form of AI that processes human language. It’s designed to respond quickly and clearly, making it a useful tool for answering basic questions and automating tasks. AI, in general, is being used across industries to simplifyprocesses and enhance productivity.
But does that mean it can handle something as complex as accounting?
Is AI the Future of Accounting?
AI certainly has potential. It can provide quick answers and automate basic accounting tasks. But is it advanced enough to replace the in-depth advice and expertise that accountants provide?
Let’s look at a few examples to see where AI stands.
What Can AI Do?
We asked ChatGPT the following accounting questions:
“What are the top 5 accounting/bookkeeping software for a limited company?”
ChatGPT’s answer:
- "Xero
- QuickBooks
- FreeAgent
- Sage Business Cloud Accounting
- Zoho Books
Each of these tools offers cloud-based services, making it easier to manage your accounts on the go. This is useful, especially for small businesses, as it simplifies day-to-day bookkeeping."
“When do I need to file my tax return?”
ChatGPT’s answer:
- "Company Tax Return (CT600): Deadline is 12 months after the end of your company’s accounting period.
- Annual Accounts: Deadline is 9 months after the end of your company’s financial year
- For personal tax returns, if you're required to submit one, the deadline is usually 31st January for online submissions after the end of the tax year(which runs from 6th April to 5th April)."
Both answers above are correct and would be helpful for a business owner seeking quick general advice. AI can handle routine inquiries like this well, giving timely responses and keeping you on track.
What Can’t AI Do?
We also tested ChatGPT with some more detailed accounting questions:
"What is the VAT threshold?"
ChatGPT’s answer:
- "As of 2024, the VAT threshold in the UK is £85,000."
What’s wrong with this answer?
The VAT threshold in the UK as of April 2024 is actually £90,000, not £85,000. While this is a small difference, getting an important number like this wrong could lead to mistakes in tax planning.
“My limited company earns £50,000. How much tax will I pay?”
ChatGPT’s answer:
- "Corporation Tax: £9,500
- Dividend Tax: £2,268.38
- Employer's National Insurance: £520.06
- Total Taxes: £12,288.44
- Net Income: £36,231.62"
What’s wrong with this answer?
The calculation overlooks important details For example, it didn’t consider salary deductions before Corporation Tax or personal income tax implications if the director has other sources of income. A professional accountant would dive into these factors to ensure accuracy ,especially as every business’s situation is unique.
It’s Not All Bad—But It’s Not Enough
While AI can be helpful for answering common questions, it struggles with the ever-changing landscape of tax and accounting. In the UK and around the world, tax rules and regulations change frequently, often with new updates from the government's annual or even six-monthly budgets. AI, like ChatGPT, uses model strained on historical data, which means it can sometimes provide outdated information. For example, as we saw earlier, ChatGPT gave the wrong VAT threshold because it hadn’t yet incorporated the latest changes.
AI Is Improving. What About The Future?
This doesn't mean AI will never be able to handle accounting tasks. AI has come along way in just a few years. Who knows where it could be in the next five often years? With advancements in technology, we may see AI capable of delivering more accurate and up-to-date advice.
But at the moment, human accountants are still the best source for tax, accounting, compliance, and legal advice. Only qualified professionals can provide the personalised, reliable guidance businesses need to navigate the complex world of finance.
Why Choose a Human Professional Accountant?
At Blue Rocket Accounting, we offer:
- Over 40 years of trusted service.
- A team with 120+ years of combined experience.
- ACCA-qualified professionals are regulated by a governing body.
- Continuous professional development to stay updated with tax law changes.
Want Advice You Can Trust?
If you're looking for reliable accounting advice in Dartford, our friendly team is here to help. Book a free 10-minute call with us. Let’s make sure you get it right, every time.
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