Written by PART: 1 of 4
Reporting and compliance in finance demand accuracy, timeliness, and regulatory complexities, which result in manual processes, data overload, and high costs. Artificial Intelligence (AI) and automation offer a solution by streamlining operations, improving accuracy, and guaranteeing adherence to regulations.
Finance departments can automate tasks, reduce errors, and get helpful information using AI algorithms and Chat GPT, thus making them more efficient while cutting costs related to streamlining compliance and finance reporting. Instead of tackling current difficulties alone, AI plus automation technologies point out an era of strategic, compliant, and adequate financial operations.
Problems of Today’s Finance Reporting and Compliance
Finance peers will agree that finance reporting and compliance take too much time, and we can get overwhelmed by the details. Our daily issues are many:
- Accuracy and Timeliness: Delivering accurate and timely reports necessitates meticulous attention to detail and extensive cross-checking, often across multiple spreadsheets and hundreds of tabs.
- Manual Processes: Reliance on manual processes increases the risk of errors and consumes a significant amount of time and resources.
- Data Overload: Finance departments often struggle to maintain efficiency and accuracy due to the vast amounts of data they must analyze and report.
- Cost Implications: Maintaining finance and accounting and the associated reporting requirements often entails high costs, especially for smaller organizations.
- Complex Regulatory Requirements: Keeping up with the ever-evolving and complex regulatory landscape across different jurisdictions.
How can Automation and AI Help? And who is better?
Artificial Intelligence (AI) and automation offer transformative solutions to these challenges by:
- Streamlining Processes: AI can automate routine tasks, freeing up finance professionals to focus on more strategic activities.
- Enhancing Accuracy: Machine learning algorithms can significantly reduce errors in data entry and calculations, ensuring more reliable financial reporting.
- Regulatory Compliance: AI systems can be updated with the latest regulatory requirements and ensure finance reporting through automated checks and alerts.
- Data Analysis: Advanced AI algorithms can handle large volumes of data, providing insights and analyses that were previously unattainable or time-consuming to derive.
- Cost Reduction: Organizations can achieve significant cost savings in the long run by automating routine tasks.
Specific ChatGPT vs. Anthropic Prompts for Finance Reporting and Compliance
We’ve been using both ChatGPT and Claude and compared the responses to similar prompts. Sometimes it’s similar but there are some subtleties to note. There might be an error in Anthropic “text extraction failed” once in a while when you upload a spreadsheet in Excel, but there’s an easy workaround, use a pdf or just cut and paste the data as plain text. We uploaded a sample financial model for our company Breathe Media and let the two A.I. tools at it.
Round 1: Financial Reporting
Our first question:
Revenue Analysis: “Can you provide a breakdown of revenue streams and their respective contribution to overall earnings for the current fiscal year?”
ChatGPT’s Response:
Claude’s Response:
The Differences Between the Two
It seems ChatGPT and Anthropic can get confused with large spreadsheets with many sheets and sometimes it’s better to specify the data in the specific sheet of the worksheet. For example, tell it which tab to look in.
Chat GPT likes to show its work and calculates all the formulas for you while Anthropic gets to the point and provides the summary data. Speed-wise (at 8 PM at night), it seems Anthropic was faster than ChatGPT.
Winner, Round 1: Anthropic
Round 2: Cutting Costs:
Cost Optimization: “Provide an analysis of expenses categorized by the department to identify areas for cost optimization“.
{the responses are lengthy so we limited our responses to what they both said on marketing expenses|
ChatGPT’s Response:
From Anthropic’s Claude:
The Differences Between the Two
Anthropic’s Claude’s response was good and detailed the expenses and the breakdown of the categories but it didn’t really provide any recommendations. ChatGPT, meanwhile, rightly or wrongly, provided some areas to cut spending. Furthermore, when we asked Anthropic to create a graph, it could not do so. ChatGPT provided a nice chart, although it did look a little crazy, and all the words were mixed up.
Winner, Round 2: ChatGPT
Round 3: Key Financial Ratios
Ratio Analysis: “Calculate and interpret the key financial ratios for the company such as liquidity ratios, profitability ratios, leverage ratios, and efficiency ratios, based on the provided financial statements. Identify potential areas of concern or opportunities for improvement.”
ChatGPT’s Response:
By now we know that ChatGPT is a little more wordy and its responses are very detailed:
Anthropic Claude’s Response:
(Yes, we are using the Pro version). Claude gave us this response when we fed in the data and some generic recommendations.
The Differences Between the Two
Anthropic and ChatGTPT were both quick to know that we did not include balance sheet information and asked for it to calculate the liquidity ratio and other metrics. However, while Claude asked for it, ChatGPT took it a step forward and provided the formula as follows:
Winner, Round 3: ChatGPT
Round 4: Compliance
Regulatory Standards Compliance: “What are the key financial metrics that need to be reported quarterly to ensure compliance with regulatory standards?”
ChatGPT’s Response:
Chat GPT gave us specific financial metrics to ensure compliance with the SEC and made a list of items but didn’t really go into disclosures or footnotes that are required for the financial statements
Anthropic Claude’s Response:
It seems Claude also went straight to SEC requirements assuming we are a public company and recommended disclosures on Financial Statements, MD&A, revenues by major product line, taxes and restructuring cost items if any. Claude also asked for:
Winner, Round 4: Tie
This one is a draw because yes ChatGPT was more literal and listed the requirements but it didn’t detail any compliance requirements. Meanwhile, Anthropic’s Claude did provide the subject headings in the 10Q/10K but it could have taken it a step further by detailing the actual financial metrics.
Yes, our questions related to financial metrics but we also posed the question in the context of compliance and regulatory standards. Round 4: Tie.
Round 5: Regulatory Changes
Regulatory Changes: “I am a software company and I sell my software to enterprise customers around the world. I have branches and subsidiaries in different countries. Discuss the impact of recent regulatory changes on our financial reporting processes and any adjustments needed.”
Here is a condensed version of ChatGpt response telling us to consider:
Here is a condensed version of Claude’s response:
The Difference Between the Two:
I feel Anthropic is very literal and assumes we are focussed as accountants and controllers, making sure we follow the current pronouncements of the FASB and IFRS. Meanwhile ChatGPT provided details on the International Accounting standards, tax laws, data protection and cybersecurity regulations. It’s nice to know ChatGPT does not want us to ship our software to Russia.
Winner, Round 5: ChatGPT
Round 6: International and FX
“What are the key considerations for my company when performing inter-company consolidations among my numerous branches and subsidiaries around the world. How can I easily consolidate all the numbers into one set of financials and what are the standard practices when it comes to foreign currency translations? I have a large location in Venezuela and the currency takes large swings. What do you recommend?”
ChatGPT’s Response:
Anthropic Claude’s Response
Claude correctly mentioned ASC 830 for high-inflation economies and to avoid the local currency due to its big swings. Claude also mentioned we should translate monetary assets and liabilities at historical exchange rates but I’m not sure because when it comes to translating income statement items, the swings will look too big.
As it relates to gains and losses it suggested:
The Differences Between the Two
ChatGPT was holistic and provided a high-level response providing details on eliminations of inter-company transactions, and currency translation for foreign operations, and even told us to try software tools for consolidation. Its final recommendation was to seek professional advice for complex scenarios such as currency fluctuations in Venezuela.
Meanwhile, Claude went into the specifics of Venezuela, suggesting the temporal method of financial statements, translating monetary items at the current exchange rate and non-monetary items at historic rates. Claude also told us to separately disclose the impacts of the Venezuelan currency change. A lot more detail on impairments was provided by Claude:
Winner, Round 6: Anthropic Claude
Round 7: Growing the Top Line
Here’s one to grow revenues; “I want to accelerate the top line for my SaaS company which sells software to large enterprises. What are some proven ways to grow the top line, increase funnel conversion rates and drive larger deals and also longer term deals with customers? Please provide a table and stack rack in terms of items which may have the biggest impact while also keeping cost metrics low.”
ChatGPT’s Response:
ChatGPT started with the notion that the best way to grow was to keep existing customers. I guess the thinking is it’s lower risk and you can eventually upsell to existing customers while concurrently optimizing the sales funnel:
Anthropic Claude:
Claude wanted us to focus on account-based marketing and high-value target accounts, creating personalized marketing and sales experiences. Align marketing and sales efforts to engage decision-makers and influencers at multiple organizational levels. Makes sense.
The Difference Between the Two
ChatGPT and Claude had some good recommendations although the ranking was different. Yes keep existing customers and grow them while working on getting new customers and engaging the right people who can approve the purchase.
We decided to ask Google’s Gemini to pick the winner between the two. Gemini provided the strengths and weaknesses of ChatGPT’s response to focus on customer success and retention, while Gemni also pointed out that there are some pros and cons of the Acquisition and Sales focus method offered by Claude. It then went on to suggest a hybrid approach, taking the best of both recommendations (sounds very Google-like). Additionally, Gemini said to analyze the customer base (happy and engaged) and look at the budget… hmm, the least convincing response, it seems, was from Gemini.
Loser: Gemini
Our Takeaway
AI in Finance: Both ChatGPT and Claude can be helpful when it comes to specific inquiries, and over time, AI will become a fundamental part of accounting and finance, helping to automate routine tasks, checking for errors, and making the financials more accurate while ensuring regulatory compliance.
Comparison of AI Tools: We like to use both tools to compare, and thus far, it’s head-to-head, although ChatGPT will be more granular and show its work. Anthropic is quicker and gets to the point, which we also like. Our next topic will focus on “Enhancing Internal Control & Audit Efficiency with AI and ChatGPT,” and we’ll update you on the next head-to-head battle.