AI tools are everywhere, raising the question: can they replace a CFO or financial firm?
The short answer is: yes, ChatGPT can handle the basics. But the real value of forecasting isn’t the formulas. It’s in the judgment, assumptions, and interpretations you make along the way.
And that’s where a financial professional makes all the difference.
What ChatGPT Can Do
Our Senior Director of Business Development, Tyson Yoon, put it plainly:
“We actually use ChatGPT ourselves. Automating some of our processes saves clients money. But ChatGPT can only create the foundation. There’s a lot of assumptions and manual adjustments you need to make. AI does its best, but if you don’t put down the perfect prompt, it’s probably not going to be very good.”
So, for a founder just getting started, AI can save a bit of time and money. And it’s pretty good for:
- Basic frameworks
- Automating repetitive tasks or calculations
- Surface-level brainstorming
But that’s only the beginning.
Where ChatGPT Falls Short
Here’s the problem: forecasts live and die on assumptions.
If you want to see how your business might evolve over the next two or five years, there are a lot of variables to consider.
And if ChatGPT is making guesses on its own, it probably won’t use information that matches your industry, margins that reflect your business model, or costs that align with your contracts.
Forecasting isn’t just plugging numbers into a spreadsheet. It’s about knowing what matters, and why. ChatGPT just can’t analyze or explain a forecast in the same way an experienced CFO can.
The Complexity of Forecasting
Imagine a retail business forecasting for the holiday season.
ChatGPT might use historical data and project a standard increase. An experienced CFO, however, would know to consider new competitors entering the market, supply chain delays, or how a Black Friday marketing campaign might impact sales.
Or think about it this way: AI might assume sales grow smoothly every quarter. But a CFO remembers the last time a product launch slipped by a couple months, revenue took a hit.
That’s the kind of nuanced thinking AI can’t replicate.
We use AI to accelerate our work. It’s a great tool, but only as a force multiplier for our existing expertise.
| Want to see the kind of forecasts a CFO can build? Download our free SaaS financial modeling template (no email required). It’s plug-and-play, and models how cash flow, revenue, and profit fluctuate over time based on customer acquisition costs, sales hires, and churn rates. |
Risks of Over-Reliance on AI
It’s tempting to think “good enough” is fine. But it’s important to remember ChatGPT is basically a fancy auto-complete algorithm. It can’t think. Hallucinations are common, and forecasts that are wrong can be worse than no forecast at all.
For instance, remember the lawyers who got in trouble for using ChatGPT to prepare for court?
If not – the case was Mata v. Avianca – and those attorneys got in trouble for submitting court briefs which cited AI-hallucinated judicial opinions. They were fined $5,000, lost their case, and ordered to send apology letters to the judges whose names accompanied made-up cases.
As the saying goes, “garbage in, garbage out.” A model with bad inputs leads to bad outputs. Basing decisions on untrustworthy information could lead you to:
- Misjudging cash flow could mean hiring when you shouldn’t
- Overestimating revenue could mean missing fundraising targets
- Underestimating expenses could mean expansions that flop
And then there’s compliance: taxes, accounting standards, and reporting requirements that AI can’t be trusted to get right. Things change all the time, while ChatGPT data updates only sporadically.
As Tyson said, ChatGPT can save money by automating processes. But if you rely on it too much, without well-informed adjustments and assumptions, the downside risk outweighs the savings.
How to Combine AI Efficiency with Human Expertise
ChatGPT plus expert oversight is the sweet spot.
AI is fantastic for handling grunt work: calculations, cleaning up data sets, and building foundational models. Professionals use it all the time to augment their Excel work, code scripts to automate certain tasks, and quickly analyze or summarize text transcripts.
Which means:
- More time for analysis and strategy
- Faster turnaround
- Fewer manual errors
From here, we can refine, adjust, and stress-test the outputs.
But the human touch is still exceptionally important. Forecasting is part science, part art, and the judgment and intuition financial professionals build over their careers is tough to replace with AI models.
How Citigroup Almost Lost $900M Because of Automation
In 2020, Citigroup accidentally sent nearly $900M to a group of lenders because of a flawed automated process paired with a lack of human oversight.
Some returned the money, but others didn’t, and Citi spent years in court fighting to recover the funds.
Their mistake is a cautionary tale for business owners experimenting with AI in accounting. Automation can accelerate repetitive tasks, but when systems go wrong or make improper assumptions, the risks can be enormous.
Why Expertise is the Key to Smart Forecasting
Every one of our clients gets a monthly review meeting with their controller. So we don’t just deliver reports or forecasts. We take the time to sit with you and dive deep into everything together.
| What’s a controller? How are they different than a CFO? Read here to find out. |
“A lot of people really appreciate that,” Tyson shares. “They’re not necessarily finance people, so having someone walk them through their financial statements can be really helpful.”
ChatGPT can give you a forecast. But what are the right questions to ask? What exact information do you need to include in a prompt to create a worthwhile model? Those are the insights that make strategic decision-making possible.
We add value in other ways as well:
- Having one firm handle your taxes, and another working on bookkeeping or accounting can be time-consuming to coordinate. We’re a one-stop shop for all of your financial needs.
- You can scale and grow with us. All of our services are à la carte and provided for a predictable flat monthly fee.
- Accountants are notorious for being unresponsive. That’s why we guarantee a response to any question within 24 hours (and you’ll often hear from us much sooner).
- We’re a cloud-based company (and recently named an SME Business Review tech innovator to watch). We can save you time and cut down on errors with our automated workflows.
- Many firms, especially VC-backed companies, have to regularly deliver financial statements to stakeholders. We’re always on time, accurate, and reliable.
- It’s hard to find an accountant who can handle every situation that could come up. As a national firm with a deep bench of experts in a variety of fields, you can count on us to have the specialized knowledge you may need.
Ultimately, while AI tools like ChatGPT are powerful for automating routine tasks, they are not a substitute for the strategic insight, nuanced judgment, and deep industry knowledge that a financial expert brings to the table. At Indinero, we believe the future of finance is a partnership between smart technology and smarter people.
Ready to get forecasting you can trust? Schedule your free consultation with an Indinero expert today.
