Most small-business owners didn’t go into business to become accountants. AI tools can help close the gaps, as long as owners use them to learn rather than to hand off the work
InPart 1of this series, based on a recent SCOREwebinar, Neha Banik, head of CFO services at Pilot, explained how to protect your data and how to build a prompt that gets a useful answer. Today, we’ll look at four ways she says AI can help with business finances right now, along with some sample prompts.
No. 1: Learning the Concepts
The first use of AI is as a tutor for the financial concepts an owner may be shaky on. It also takes away the pressure of “asking a dumb question in front of an accountant,” Banik says.
“Every decision downstream, whether it’s pricing or hiring or whether to take a loan, all depends on the numbers underneath it,” she says.
Explain the difference between cash and accrual accounting for a [type of business]. Which would make more sense for a business like mine, and how do I find out which one I’m using now?
I run a [business type] with [headcount/monthly revenue]. What’s the difference between a P&L, balance sheet and cash flow statement, and which should I check most often?
Explain gross margin vs. net margin for a [product business with inventory/service business with mostly labor]. What’s considered a healthy range for a business like mine, and where does that figure come from?
The details in the brackets change the answer, Banik says. A business with slow-paying clients cares a great deal about cash vs. accrual accounting. A cash-only food truck barely does.
No. 2: Spotting Patterns
“A lot of financial trouble in small businesses isn’t just one big mistake. It’s a lot of small things that go unnoticed for months,” Banik says.
A duplicate charge, a subscription nobody canceled or an expense filed in the wrong category can quietly throw off margins.
“These problems typically don’t announce themselves. They compound,” she says. “And the difference between catching them in month one versus month 14 translates to real dollars.”
I run a [business type] and use [QuickBooks/Square/Wave]. What bookkeeping mistakes or anomalies do businesses like mine tend to miss, and how would I spot-check for them each month?
Help me build a 10-minute monthly financial review checklist to catch duplicate charges, forgotten subscriptions or miscategorized expenses for a [business type].
What are the warning signs that a transaction has been miscategorized in my books? What would that actually look like if I were scanning my own bank statement?
“All three of these prompts are not asking the AI to catch the mistakes for you,” she says. “They’re asking the AI to teach you how to catch patterns and recognize trends.”
No. 3: Drafting the Hard Messages
Invoice follow-ups, price increases and updates to a business partner are “some of the most avoided writing in business,” Banik says. AI can turn out a first draft quickly, though it only knows what you tell it.
“It won’t necessarily know your specific relationship with the client unless you’re giving all of those details, but it is excellent at getting you a strong first draft in seconds,” she says.
Write a polite but firm follow-up email to a client whose invoice is [x days] overdue. I run a [business type] and this is our [first/second/third] reminder.
Help me write a price increase announcement to clients of my [business type]. I want to explain the why, [rising material costs, added services], without sounding defensive.
In the price increase prompt, Banik says the key phrase is “without sounding defensive.”
“You want it to be as neutral as possible,” she says.
No. 4: Prepping for the Experts
“One of the best uses of AI is to really help you get smarter before you talk to an expert, notinsteadof talking to one,” Banik says.
Walking in with the right questions and a basic grasp of the subject can turn a “potentially confusing conversation” with a bookkeeper, lender or accountant into a productive one, she says.
I run a [business type] and I’m meeting a bookkeeper for the first time. What questions should I ask to know if they’re a good fit for a business like mine?
I’m a [business type] applying for a small business loan. What financial documents do lenders typically want, and how should I prepare before I apply?
Help me draft a list of questions to ask my accountant about how my business is legally structured versus how it’s taxed, and whether an S-corp election would make sense for a [business type] at [revenue stage].
Notice that none of the four uses involves putting your actual books into an AI tool.
“All of them so far do not involve touching your actual books,” Banik says. “And so that’s not by mistake.”
Come back Thursday for the conclusion of this series, where we’ll look at where AI hits its limits, and why a financial professional still matters. For Part 1 of this series, clickHERE.
