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Using AI to do accounts

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GNewland

GNewland

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Business Listing
Sep 24, 2024
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Wales
brickle.co
I realise I may well get slated heavily for this, especially in this sub forum, but I have been considering using AI to do my accounts. Has anyone here done this and do you feel the output has been acceptable for small business filings?

I did a test feeding ChatGPT an excel output from my business bank account, telling it shareholder capital vs loan and asking it to ask me any clarifying questions it needed. The output seems to a 'relatively' untrained eye to be acceptable for my first filings.

I am doing this because the quotes I've had from accountants seem to be quite out of whack with the profits that we are generating so far. I realise a good accountant can save you money making suggestions that optimise the tax treatment of your business but we are not there yet in scale where this is relevant.

Thoughts appreciated.
 
Are you prepared to take on HMRC in court to defend your account if they don't like your filings?

At least with an accountant you have some legal redress should they mess things up.
 
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What size business? How complex are the accounts?

I wouldn't trust AI with all but the simplest and, if you've kept good records throughout the year, then it should be fairly trivial to do this yourself with low cost software.

I've saved a considerable amount doing my own accounts for the past two years. It costs me roughly £100/yr for VT Accounts (I already use VT Transaction+ so integration is straightforward), a few £/mo for a 365 subscription needed to get 32-bit Excel. and a small amount (around £25, I think) for filing software.

I do my own bookkeeping and reconcile everything at the end of every month so there are never any issues at year end.
 
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Companies House: The registrar actively queries and rejects non-compliant, misleading, or structurally flawed financial statements using enhanced enforcement powers. Persistent issues or uncorrected filings can trigger a criminal prosecution under Section 451 of the Companies Act.

HMRC: Tax authorities routinely cross-reference public Companies House figures with detailed Corporation Tax returns. Blatant mismatches trigger targeted tax inquiries and automated audits
 
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Generative AI is not a deterministic system and therefore should not be relied on. See this post and then remember that you will not have an accountant checking your work if you proceed as you are planning.
https://www.accountingweb.co.uk/pra.../accountants-count-the-cost-of-clients-ai-use

Some accounting software packages are integrating machine learning, but that is very different from feeding numbers into generative AI.
 
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martin_shl said:
Some accounting software packages are integrating machine learning, but that is very different from feeding numbers into generative AI.
Click to expand...
This is the important distinction in my opinion.

If 'Genrative AI' has been used then generating output is its purpose, it will generate output even if it is wrong. That is why I'd advise against using a basic ChatGPT et all to do your accounts, because it is a generalist generative AI tool.

However, Machine Learning (often incorrectly marketed as AI) and AI tools that have been guardrailed and specifically trained and programmed to perform bookkeeping tasks can be useful. Just make sure you use one that has been setup for that purpose, uploading your bank statements into ChatGPT (or Claude as per that AccountingWEB article) is just asking for trouble as it'll just make stuff up to generate an answer for you.
 
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The old round wheels are much better than the new fangled square ones
 
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GNewland said:
I realise I may well get slated heavily for this, especially in this sub forum, but I have been considering using AI to do my accounts. Has anyone here done this and do you feel the output has been acceptable for small business filings?

I did a test feeding ChatGPT an excel output from my business bank account, telling it shareholder capital vs loan and asking it to ask me any clarifying questions it needed. The output seems to a 'relatively' untrained eye to be acceptable for my first filings.

I am doing this because the quotes I've had from accountants seem to be quite out of whack with the profits that we are generating so far. I realise a good accountant can save you money making suggestions that optimise the tax treatment of your business but we are not there yet in scale where this is relevant.

Thoughts appreciated.
Click to expand...

When you say you are getting AI to do your accounts what do you actually mean - asking it to create a set of accounts from your bank statements? Presumably it's a limited company as you mentioned share capital?
 
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GNewland said:
I realise I may well get slated heavily for this, especially in this sub forum, but I have been considering using AI to do my accounts. Has anyone here done this and do you feel the output has been acceptable for small business filings?

I did a test feeding ChatGPT an excel output from my business bank account, telling it shareholder capital vs loan and asking it to ask me any clarifying questions it needed. The output seems to a 'relatively' untrained eye to be acceptable for my first filings.

I am doing this because the quotes I've had from accountants seem to be quite out of whack with the profits that we are generating so far. I realise a good accountant can save you money making suggestions that optimise the tax treatment of your business but we are not there yet in scale where this is relevant.

Thoughts appreciated.
Click to expand...
Do you know enough about accounts to spot when AI makes up the answer? If so, just do it yourself. If not, employ a human.
 
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I'm in the middle of an Online AI Course provided by my Professional Body. The course is primarily aimed at ensuring compliance with GDPR and ensuring Client Confidentiality whilst using AI in it's various forms.

So far it has taught me that a RAG Assessment ( Red, Amber, Green ) can be used by bookkeepers and payroll specialists to identify which tasks a Public AI can do ( Green ), which tasks a Public AI can do provided additional safeguards and data management are applied first ( Amber ) and which tasks are completely prohibited from AI usage ( Red ).

One example of a Red category activity is Bank Statements being fed into a Public AI. This is prohibited as Red in the RAG decisión tree. So it is clear that what the OP has described is not currently acceptable for Professionals to use.

This is not because there may be something incorrect about the AI output.

It is Red because it is unacceptable from a GDPR perspective and from a Client Confidentiality perspective.

Of course GNewland can make their own choices about whether or not to comply with GDPR because it is their own data anyway and likewise GNewland my not be constrained by considerations of Client Confidentiality.

But there is a wider point here. The safe use of Public AI is not just about whether or not the output is accurate. It is also about how do we control and protect our personal and financial data.
 
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I would be seriously questioning what other dumb decisions you might be thinking of making.
 
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AI for accounts

Pros:
None

Cons:
Need to feed it the spec (or equivalent) for a proper accounting package
Need to give it access to your banking information
Change it every time the rules change
Need extensive testing
Need to test all changes to rules
Need to interface to MTD etc.


A close run decision!!
 
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AI can definitely be useful here, particularly for organising transactions, identifying patterns and helping with the bookkeeping side of things.

The main thing I'd be cautious about is treating the output as the finished accounts. If the underlying data is incomplete, or a transaction is classified incorrectly, AI can produce something that looks perfectly reasonable while still being wrong.

For a small business with relatively straightforward transactions, using AI as a starting point could make sense, especially if you're comfortable understanding and checking the output yourself.

It's also worth bearing in mind that an accountant's value isn't necessarily proportional to the company's current profit. Even at an early stage, things like director/shareholder loans, dividends, expenses, VAT, and the distinction between capital and revenue can create issues that aren't always obvious from a bank statement.

A sensible middle ground might be to use AI as a bookkeeping and analysis tool, while having a professional review the accounts and filings before they're submitted. That could give you some of the cost savings without relying entirely on AI for the final figures.
 
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GNewland said:
I realise I may well get slated heavily for this, especially in this sub forum, but I have been considering using AI to do my accounts. Has anyone here done this and do you feel the output has been acceptable for small business filings?

I did a test feeding ChatGPT an excel output from my business bank account, telling it shareholder capital vs loan and asking it to ask me any clarifying questions it needed. The output seems to a 'relatively' untrained eye to be acceptable for my first filings.

I am doing this because the quotes I've had from accountants seem to be quite out of whack with the profits that we are generating so far. I realise a good accountant can save you money making suggestions that optimise the tax treatment of your business but we are not there yet in scale where this is relevant.

Thoughts appreciated.
Click to expand...
I can see why you'd try it for a very small/simple business, especially if the transactions are straightforward. The part I'd be cautious about is using an AI output as the final set of accounts without someone checking the underlying treatment. It can categorise transactions well, but things like director/shareholder loans, accruals, depreciation, VAT and tax treatment can get complicated quickly.You’re still responsible for the accounts as a director even if software or an accountant prepares them.I’d probably use AI to do the bookkeeping/initial analysis and then pay an accountant for a one-off review and filing, rather than paying for full bookkeeping every month. That could give you most of the cost saving without taking on all the risk yourself.
 
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chenmichael said:
I can see why you'd try it for a very small/simple business, especially if the transactions are straightforward. The part I'd be cautious about is using an AI output as the final set of accounts without someone checking the underlying treatment. It can categorise transactions well, but things like director/shareholder loans, accruals, depreciation, VAT and tax treatment can get complicated quickly.You’re still responsible for the accounts as a director even if software or an accountant prepares them.I’d probably use AI to do the bookkeeping/initial analysis and then pay an accountant for a one-off review and filing, rather than paying for full bookkeeping every month. That could give you most of the cost saving without taking on all the risk yourself.
Click to expand...
Thank you for the thought through response, as opposed to the derision (expected), from a moderator (not expected).
Thank you also to the other responses pointing out areas to look out for.

I'm paying an accountant and will compare their results with interest.
 
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GNewland said:
Thank you for the thought through response, as opposed to the derision (expected), from a moderator (not expected).
Thank you also to the other responses pointing out areas to look out for.

I'm paying an accountant and will compare their results with interest.
Click to expand...
Good luck!
 
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Everyone's covered the accuracy and data protection side, so I'll add the bit nobody's mentioned. From April 2026 this approach has a compliance problem as well as a reliability one.

If you're over the threshold and inside MTD, the rules aren't just about the final numbers being right. They're about how the records are kept. You need the underlying records held digitally, and the figures need to reach the filing without being manually retyped along the way.

Pasting a bank statement into a chat window and copying the summary out the other end fails that on both counts. There's no digital record and there's no digital link. Even if every figure it gave you happened to be correct, the method itself doesn't meet the standard.

Which isn't an argument against AI doing this work. It's an argument for it being built into something that keeps the records properly, rather than being a separate window you paste into.

On the cost point that started the thread, that's a fair frustration and a common one. But the gap between a quote you thought was steep and a wrong filing is usually wider than it looks from here.
 
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Interesting thread — I've been doing something similar (feeding bank exports/expenses to ChatGPT for a first pass), and it's genuinely decent for structuring/categorising as long as you sanity-check the output, especially anything involving director's loan vs capital treatment.

One thing I'd flag though: be careful what you're pasting in. If there's anything with employee data mixed in alongside the bank data — payroll runs, NI numbers, salaries — that's now sat on a third-party server. Got nervous about this myself and ended up building a small tool that strips the personal bits out (emails, NI numbers, postcodes, amounts) before it goes into ChatGPT/Claude, then restores them locally once you've got the answer back. Happy to share the link if it's useful — no idea if it applies to your exact setup, but seemed worth flagging given what you're feeding it.
 
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