How Finance Directors and CFOs can use ChatGPTMay 05, 2023
I thought I would go through this topic in two parts.
The first part is written by ChatGPT. I just asked it the question on how CFOs should use it.
The second part is written by myself and how I currently use it.
I would love to know if you use it in different ways to what both it and I suggest! Leave your comments below or email me at [email protected]
PART ONE (CHATGPT)
As the role of the Chief Financial Officer (CFO) continues to evolve, technology has become an essential tool for managing the financial health of an organization. ChatGPT, a language model developed by OpenAI, is an example of such technology that can help CFOs with various financial tasks. In this article, we will explore how CFOs can use ChatGPT to streamline their work and make informed financial decisions.
Forecasting: One of the most important tasks of a CFO is to make accurate financial forecasts. ChatGPT can assist with this task by analysing historical financial data and predicting future financial trends. This can include sales forecasts, cash flow projections, and budgeting. CFOs can input data into ChatGPT and ask it to provide predictions based on that data.
Risk Management: Managing financial risks is another crucial task for CFOs. ChatGPT can assist with this by identifying potential risks and suggesting strategies for mitigating them. CFOs can ask ChatGPT to analyse data from various sources, such as financial reports, market data, and news articles, to identify potential risks to the organization. ChatGPT can also provide insights into the potential impact of these risks and recommend ways to mitigate them.
Financial Analysis: CFOs are responsible for analysing financial data to identify trends and insights that can inform financial decisions. ChatGPT can help with this by analyzing financial data and providing insights into trends and patterns that may not be immediately apparent. CFOs can input data into ChatGPT and ask it to identify any anomalies or patterns that they should be aware of. This can include trends in revenue, expenses, or other financial metrics.
Cost Optimization: Another critical task for CFOs is cost optimization. ChatGPT can assist with this by identifying areas where costs can be reduced without compromising quality or efficiency. CFOs can ask ChatGPT to analyse financial data and suggest cost-saving measures, such as optimizing supply chain logistics or reducing non-essential expenses.
Decision-making: CFOs often have to make difficult financial decisions that can have significant implications for the organization. ChatGPT can assist with this by providing insights into potential outcomes and recommending strategies for achieving specific goals. CFOs can input data into ChatGPT and ask it to provide recommendations for financial decisions, such as investment opportunities, mergers and acquisitions, and other financial transactions.
Financial Reporting: CFOs are responsible for generating financial reports that provide insights into the financial health of the organization. ChatGPT can assist with this by analysing financial data and generating reports on financial performance, cash flow, and other financial metrics. CFOs can input data into ChatGPT and ask it to generate reports on specific financial metrics or trends.
Overall, ChatGPT is an invaluable tool for CFOs that can help them streamline their work, make informed financial decisions, and optimize financial performance. CFOs can use ChatGPT to assist with various financial tasks, such as forecasting, risk management, financial analysis, cost optimization, decision-making, and financial reporting. By leveraging the power of ChatGPT, CFOs can gain insights into financial trends and patterns that may not be immediately apparent and make more informed financial decisions.
PART TWO (ALYSHA RANDALL)
I must confess, I haven't used ChatGPT for all of the suggestions that it has made above. Largely because the financial reports for the size of companies that I'm looking at aren't necessarily that big and are therefore easy enough to read. But I have used it quite practically for tasks that can take longer than they should, especially if they're word (rather than number) based!
Financial KPIs: I have used it to do a quick financial analysis on much larger companies (when I'm looking at suppliers, competitors, other due diligence), rather than the startups that I work with. I have also dumped financial data into it and asked it to come up with various financial metrics, which I pick and chose from, as a lot aren't necessarily relevant for these smaller companies.
Internal Communication: I have used it a lot to help me with summarising large reports or converting board reports or financial summaries into shorter and less formal language, for example an All Hands slide deck. Sometimes I have tried to explain something and the sentence is really long or clunky, so I ask ChatGPT to word it better for me.
I also like to use it for Executive summaries. Much easier to dump the long-form report into ChatGPT and ask it to write an Executive summary. It takes literally seconds.
Written Policies: I have built up Internal policies using ChatGPT. I have found that it works well by providing me with a Framework or a base to start with and then I edit it to be more suitable and often in a more friendly manner. Or I add in examples to the text.
Excel formulas & other software: This is a no-brainer. I think finding out how to do either excel formulas or any other tech code, ChatGPT is really powerful. I used to put the question in Google and then go through a couple of articles until I found one that is relevant. Now, I just ask ChatGPT and I get the answer straight away. I can also ask it for examples, or give it my example so it can give me the exact formula.
It's also useful to help you with certain types of software, such as PowerBI, SAP, etc.
Titles, names and copy: As an FD or CFO of a smaller company, you are often helping the leadership team with more than just numbers and sometimes you just need to brainstorm names or catch-phrases or sales copy or marketing or even the name of a new product. This is where ChatGPT really comes into its own. I have sat in many leadership team meetings now and had ChatGPT open and used it help us brainstorm different ways of saying different things for customers. Simply by typing in "give me 10 different ways to say x" and it pops out in seconds. This has been invaluable.
Email templates: Whether its to board members, templates for your credit control, long emails to investors, without hesitation I ask ChatGPT to prepare the initial template and then edit it to suit my needs. In order to do this, I always prep the tool first - who is my audience, what do I want them to takeaway and what information needs to be included among other things.
How to questions (with a caveat): Any time I want to ask Google for something, I'm now getting into the habit of asking ChatGPT, however there is a caveat. As ChatGPT is only programmed up to 2021, there is no point asking it for the new tax codes for the current year 2023/2024. So, for questions on legislation and the latest accounting standards, it still has a little way to go - but give it time. This is the first generation of ChatGPT and sooner or later (my guess is sooner), you will be able to ask any tax / accounting / legal question you want.
I'm sure there are 100 different ways that FDs and CFOs can use this tool and I'm very keen to learn more! So please do fill me in and I'll edit this post to add more for everyone to learn too.
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