The Pythonic Accountant: Using GPT-4 for Reconciliation

Overview

• Demonstration on how to use GPT-4's Advanced Data Analysis tool to perform a reconciliation between two CSV files.
• Files used: a general ledger detail for sales revenues (summary level) and a subledger detail for sales revenue.
• Intentionally included discrepancies: cut-offs, returns, and other anomalies.

Initial Setup

• Opened a separate tab to ask GPT-4 to help reconcile the two files.
• Instructed it to treat discrepancies seriously and to highlight any necessary adjustments in the general ledger.

GPT-4's Approach

1. Reading Files

   • Loaded both CSV files using basic Python commands.
   • Examined the content of each file by displaying the first few rows.

2. Aggregating and Merging Data

   • Aggregation: Sales revenue aggregated by date.
   • Merging: Combined aggregated subledger data with the general ledger data by date.

3. Identifying Discrepancies

   • Calculated the differences between the sales revenue in both ledgers.
   • Created a 'difference' column to identify the variances (positive values indicate higher amounts in the GL).
   • Found significant variances on multiple dates; inconsistencies were both positive and negative.

Further Exploration

• Attempted to push GPT-4 to further investigate the causes of the discrepancies.
• Rechecked the files for additional columns but found only date and amounts.

Adjustments Based on Subledger Assumptions

• Assumed subledger data was correct and GL data was potentially incorrect.
• Asked GPT-4 for the necessary journal entry to correct the GL.

Journal Entry Suggested

• Credit: Sales Revenue account.
• Debit: Accounts Receivable (or another suitable account).
• Emphasis on verifying the correct debit account.

Potential Root Causes of Discrepancies

• GPT-4 provided several potential root causes:
  • Data transposition
  • Duplicate entries
  • Omitted entries
  • Timing differences
  • Systemic software issues
  • Data migration issues
  • Complex transactions
  • Returns (highlighted upon further prompting)

Handling Returns

• Returns might not process correctly, causing discrepancies.
• Suggested journal entry for sales returns if identified as a part of the issue.

Conclusion

• Demonstration showed the capabilities of GPT-4 in conducting reconciliation tasks.
• Encouraged viewers to like and subscribe for more similar content.

Key Takeaways

• GPT-4 can be a valuable tool for bookkeepers and accountants, especially for identifying discrepancies and suggesting journal entries.
• It's essential to verify and understand the underlying data and possible causes to make accurate adjustments.