Short answer Paste the prompt below into ChatGPT, Claude, Gemini or Copilot with your own details and you get a plain-English walk through your profit and loss report, what each line means, what stands out, and questions for your accountant. Works on free plans. Time saved: about 30 minutes each month, and better questions for your accountant (estimate).
Why it helps
Your accountant sends a profit and loss statement, or Xero shows one, and it's a list of numbers with words like "gross profit" and "cost of sales". Many owners nod along and look at the bottom line only. The useful stuff is in the middle: which costs are growing, and whether your margins are holding up.
AI can explain each line in plain words and point out what's changed since last period, using only your numbers. It helps you ask better questions. It doesn't replace your accountant.
The prompt
Copy it, swap the bits in [square brackets], and paste it into ChatGPT, Claude, Gemini or Copilot.
I run a small [type of business] in New Zealand. Below is my profit and loss statement for [period], with [the same period last year / last month] for comparison. Explain it to me in plain NZ English. Please: 1. Explain what each main section means (income, cost of sales, gross profit, expenses, net profit) in one or two sentences each. 2. Work out my gross margin and net margin as percentages for each period. Show the sums. 3. Point out the 3 biggest changes between the two periods, in dollars and percent. 4. Give me 5 questions to ask my accountant. Rules: - Use only the numbers I give you. Don't guess at reasons for changes. Say "ask your accountant" or "check your records" instead. - Don't give tax advice or tell me what to cut. - Keep it short and friendly. My profit and loss: [paste the summary lines, with no bank account or customer details]
Then keep chatting
Explain the difference between profit and cash in the bank, using my numbers.
Put my P&L into a simple table I can paste into a spreadsheet, with the percentages.
What does "cost of sales" usually include for a business like mine? Mark anything I should check.
Step by step
- Run a profit and loss report in Xero, MYOB or your accounting app, or use the one from your accountant. Pick two periods to compare.
- Copy the summary lines (the headings and totals). Leave out bank details, customer names and staff names.
- Paste them into the prompt and read the explanation.
- Check the margins and changes against your report, or in a spreadsheet. AI can make arithmetic slips.
- Take the questions to your accountant, and repeat each month or quarter so you spot trends early.
Worked example
Example details are made up. Your results will vary, so always read and check before you use them.
Watch out for
- Check the maths. Paste the numbers into a spreadsheet and check the margins yourself. One slipped digit changes the story.
- AI doesn't know why your numbers changed. If it gives reasons you didn't tell it, ignore them and check your records or ask your accountant.
- Privacy: paste the summary lines only. Don't upload full reports with bank account numbers, customer or staff names, or your IRD number.
- For tax questions, go to your accountant or ird.govt.nz. Business.govt.nz also has free guides to reading financial statements.
Go further
Profit isn't the same as cash, so pair this with the simple cashflow forecast use case to see what's coming in and out. If food costs are the problem, the menu costing use case works out your margin dish by dish.
