Bookkeeping can feel like a foreign language: accruals, VAT, receivables, depreciation. AI assistants are great at explaining these ideas in plain words, helping you organize expenses, and preparing better questions for your accountant. They’re not a replacement for an accountant, and they shouldn’t see your sensitive financial data.
What AI is good for
| Task | Example prompt |
|---|---|
| Explain terms | “Explain the difference between profit and cash flow with a simple café example.” |
| Categorize expenses | “Suggest an expense category for each item: taxi to client, printer ink, Instagram ads, office tea, laptop repair.” |
| Set up a system | “Suggest 12 simple expense categories for a small design agency.” |
| Spreadsheet help | “Write an Excel formula to total expenses by category and month.” See SUMIFS. |
| Understand reports | “What does a balance sheet show, and what 3 things should a small business owner check on it?” |
| Prepare for your accountant | “I’m meeting my accountant about year-end. What documents and questions should I prepare?” |
Example: categorize a month of expenses
- Export or copy your expense list without account numbers, names or personal details: just date, description and amount.
- Prompt: “Assign each row one category from this list: Rent, Salaries, Supplies, Marketing, Transport, Utilities, Software, Repairs, Other. Return a table with a new Category column. Flag anything unclear.”
- Review the flagged items yourself.
- Paste the result into your expense tracker or petty cash log.
Example: understand a report
“Here is my simplified monthly summary: sales 12,000, cost of goods 5,000, rent 1,500, salaries 4,500, other 700. Explain my gross profit, net profit and margin in simple words, and suggest 3 questions I should ask my accountant.”
What AI should NOT do
- ❌ Give final answers on tax, VAT or legal matters. Rules depend on your country and situation and change over time.
- ❌ Replace your accountant or approved accounting software.
- ❌ Receive bank statements, account numbers, IDs or payroll details in a personal account.
- ❌ Be trusted for calculations without checking. Always recheck totals in Excel.
Read Is it safe to use AI at work? and how to fact-check AI answers.
Good habits
- Use AI to learn and organize. Use your accountant to decide and file.
- Anonymize and round numbers when you just need an explanation.
- Keep your records in one place with simple templates. See bookkeeping basics.
Quick summary
- AI is a patient tutor for accounting terms, categories and spreadsheet formulas.
- It’s not a tax advisor. Confirm anything important with a professional.
- Never paste sensitive financial data into personal AI accounts.