By Michael Leonardi, CPA
As a Fractional CFO, I am always looking for ways to increase my efficiency and effectiveness in advising companies on their financial strategy. Staying on top of trends, the economic environment, and gathering and analyzing data are a large part of my role to ensure I’m making the best recommendations for my client’s business. Technology helps with this in many ways, and its capabilities are increasing rapidly.
We are entering a new era where artificial intelligence (AI) is accelerating how efficient each of us can be. In the very near future, AI tools are going to be just as critical to all of our roles as a Google search. In today's modern era, proficiency in utilizing Google is essential for efficiency. Likewise, lacking expertise in AI tools will hinder your ability to access information quickly and make informed decisions.
As CFOs and executives, it’s essential that we learn how to interact with AI effectively. In this article, I discuss where AI is now, where AI could be going in the future, and how you can be using AI to increase your efficiency right now.
Where AI is now – and why we’re hearing so much about it.
AI is a basket of technologies that do different things. What they have in common is that they take vast data sets of information and layer on top an interface that allows us to interact with it.
Level 1 of AI was all about the robots. Known as Traditional AI or Robot Process Automation (RPA), level 1 of AI recognizes patterns in mass amounts of data, classifies data, and makes predictions. It’s commonly found in a lot of software tools. It analyzes data and executes the tasks that it’s programmed to do. For example, there are finance and accounting tools that intelligently sort transactions, create expense reports, reconcile accounts, and more.
Now we’re in Level 2 – where AI feels a lot more human. Through Generative AI tools, like Open AI’s ChatGPT, we can talk to AI in a natural, conversational way. Based on the context and content it’s trained on, it produces entirely new content. The most prominent version is text, but there is also AI that is generating graphic design, photo-realistic pictures, audio, and more. Mid Journey, Dall-E, and Jasper AI are a few additional examples.
The natural language format of these “Level 2” AI tools makes AI accessible to everyone, and it allows us to process and create content with a level of speed and efficiency that wasn’t available before.
Where AI is going – and what AI means for our roles as finance professionals and executives.
One of the things that’s critical with AI technology is understanding how it impacts our roles as executives, CFOs and financial professionals.
The way I see it, AI is another tool at our disposal that helps us sift through large amounts of information. As CFOs, for example, we are constantly dealing with large sets of data. We take in as much information as possible, look for patterns, and provide value by turning data into actionable intelligence that we can provide leadership teams. We combine it with our own skills and knowledge to make the best possible recommendations that we can. AI speeds up that process, allows us to digest even larger amounts of data, and makes us more effective.
It will soon become indisputable that each individual must possess the knowledge of effectively leveraging AI to stay abreast with the pace of business in our respective roles. However, we are still far from the point where AI can replace our positions, particularly at the CFO and executive levels. Will there be portions of our roles that AI will take over? Yes, we’ve already seen this at the administration level. AI will free us up to work on higher-level strategic work (and do that work faster). However, human intervention will always be necessary in leading and executing a company’s finance and accounting functions.
AI is powerful, but it doesn’t fully consider the human element. AI can generate unexpected and inaccurate results (sometimes referred to as “hallucinations”). Additionally, it lacks the understanding of human intuition and how that might change the relevance of the results.
Instead of expecting AI to replace the finance and accounting function in the future, it is more advantageous for companies to consider engaging with a highly effective and efficient Fractional CFO who utilizes the best tools available such as AI. While many organizations likely don’t require a full-time CFO, there will always be a need for someone to analyze the quantitative results from the AI, provide their unique industry expertise and knowledge, and make a fully informed recommendation.
How CFOs and executives can start using AI to be more effective right now.
AI is extremely useful for a CFO or executive whose time is very limited. As I mentioned, I am a Fractional CFO who works with several businesses advising them on financial strategy and execution. My focus is on working with tech startups, and I’m very passionate about technology as well as finance. Here are some recommendations based on how I’ve been using Open AI’s ChatGPT in my own daily workflows.
1. Researching and Summarizing Information
ChatGPT is an incredible tool for busy CFOs and executives who need to research a lot of information, are responsible for condensing a complicated topic for a client or team, or want to boost the amount of content they absorb–quickly and effectively.
Use ChatGPT to:
Paste in a link to an article and ask ChatGPT to give you a summary.
Engage in a conversation about those points or summary.
Tell it who you want it to respond as/to, and see how it is able to tailor content directly to your use-case. The more context you give it, the more powerful it becomes.
Example prompts to ask ChatGPT:
“Can you summarize the top 3 points of this article?”
“Provide a 300-word summary of this article.”
“Tell me more about what it said on [this topic].”
“Boil down this information using a viewpoint of a CFO with 25 years of experience.”
“From the viewpoint of a novice, or someone who doesn’t understand finance, tell me why inflation is bad for people.”
With a Google search, we all learned how to use keywords and search terms. With AI, it’s now about learning how to use prompts. You can ask it questions or ask it to create something for you, but it takes practice and experimentation to figure out how to craft effective prompts so that it gives you responses tailored to exactly what you’re looking for.
2. Creating New Content
CFOs and executives can use AI to help drive the creation process and drive it faster. Within seconds AI will feed you ideas, then you can iterate on those ideas.
Drafting Documents and Presentations
Finance and accounting professionals tend to be more numbers focused, however, CEOs and leadership teams need to make sense of a lot of information, and it’s on us as CFOs to present that information in a more creative fashion. We can use AI to create content that can be utilized by a company to inform better decision making.
AI can help us generate and improve content for:
Pitch deck presentations
Business plans
Written narratives for financial analysis
Example prompts to ask ChatGPT:
“Create an outline for a pitch deck soliciting funds from angel investors for a small tech startup in the SaaS industry.”
“Draft a business plan for an e-commerce startup with 3 different lines of businesses.”
“This is a pitch for an e-commerce startup. I’m talking to VCs to ask for series A investment. I need help in this section. Generate content around ___.”
“In the style of this pitch deck, help me generate a pitch deck that’s similar to that for this type of company seeking this amount of funds.”
“I’m writing a financial analysis to explain our company’s performance to the company’s board of directors. Help me make it more succinct.”
You’ll have to iterate on this content, give it parameters and more information, check for accuracy, and battle test it (more on that below), but you can use it to create something unique and interesting faster than you would’ve been able to alone. For highly complex tasks and analysis, try breaking it down into small sections and iterate through those pieces.
Excel Sheets & Coding
For executives, CFOs, or accounting professionals who are using Excel frequently or digging into code occasionally, there are instances where you can collaborate with ChatGPT to increase your efficiency. It can correct your mistakes, give you formulas, and simplify your logic. It can debug javascript, python, HTML and explain what the code does, giving you the opportunity to fix it or understand it yourself before engaging with developers.
Example prompts to ask ChatGPT:
“What’s wrong with this formula?”
“I’m trying to ___. What’s a good formula for this?
“Is there a more condensed way to come up with the same logic?”
“Explain to me what this code does and how it does it as if I’m a financial professional with a very base-level of coding knowledge.”
On occasion, we may overlook the distinction between two apostrophes and a single quotation mark, but ChatGPT is able to identify such errors. While pivot tables and v-lookups demand a specific format, the index function offers flexibility to search anywhere in your data. Although many people are not well-acquainted with the index function, ChatGPT can guide you on when and how to utilize it. By describing your data and objectives to ChatGPT, you'll undoubtedly witness a significant acceleration in your creative process.
It’s a game-changing technology, but that being said, it’s not 100% there yet.
Right now, ChatGPT is still very confident even when it’s wrong. It will occasionally make up something because it wants to try to engage with us. For that reason, we should not consider it an authoritative source, but I anticipate that may change in the very near future. ChatGPT launched in November 2022 and it was already on version 4 as of March 2023. It’s improving exponentially every week. Based on my experiences, its results are approaching 90-95% correct based on the data sets that it has. It’s gotten iteratively better in an insanely fast amount of time.
My recommendation is to "battle test” your results. Start by asking questions you already know the answer to. That way, you can gain confidence in what it can and can’t do. For questions you don’t know the answer to, check the results for accuracy. You can ask ChatGPT to provide its sources so you know what information it’s pulling and can verify it. There is an early-stage API interface that allows you to add and analyze your own data as well.
In the hands of a professional, ChatGPT can help boost your efficiency when doing analysis, making recommendations, and helping customers and clients make better decisions.
The best thing an executive or finance professional can do is dig in!
My primary recommendation is that we all start becoming comfortable with AI now. AI is not going away; it’s only going to accelerate. It’s incumbent upon all of us in the profession to get used to building prompts and asking really good questions in a way that AI can return something to us of value. Chat-based AI tools and prompts are the leading AI interface, so this skill is key.
We’re early on in the emergence of AI, but this is happening quickly. Start trying it out. Get used to the interfaces and functionality, and get a feel for how to leverage it. Create free accounts, experiment, battle-test it, and talk to people about how they’re using it and what they’ve learned.
If you want to exchange stories and insights, connect with me on LinkedIn. I’ll look forward to hearing from you! If you’re interested in learning more about how a Fractional CFO can help your company reach its next stage of growth, connect with Ascent CFO Solutions.
About the Author:
Michael Leonardi is a Fractional CFO as well as a Bitcoin and cryptoasset solutions strategist with 25 years of accounting, finance, and operations experience. His mission is to help growth-oriented companies solve complex challenges utilizing a combination of technology and skilled leadership. Read more