Welcome to Beyond the 10-Key, a regular article discussing powerful and unique ways to utilize AI in the tax, accounting, and financial services industry. With the influx of new AI-based platforms and the ease at which these tools can be used, hardly a day goes by where a typical conversation doesn’t migrate to how AI can improve our processes, client interactions, and more.
Topic: Using AI to Sell Reasonable Compensation Reviews
One of the biggest challenges many business owners face is determining reasonable compensation for themselves. This is never a “one-size fits all” solution and many business owners either underpay OR overpay themselves. The former can result in significant penalties while the later can result in paying additional tax.
Your firm can assist its business clients conduct a review to ensure they are within compliance as well as reducing tax. However, these reviews should not be completed for free; many firms charge well over $1,000 (larger firms even scale up to $7,500). And sometimes it takes effort to convince a client to invest in a reasonable comp review. Amazing tools such as RCReports provide amazing detail with verifiable information, but they can be costly. I want to be clear that the findings in this prompt are basic, but a good guide and we still leverage another tool to provide a through review that includes full benefits and through position-related details.
In our firm, we use AI to conduct a preliminary reasonable compensation review and then use that information as a basis to engage the client in a full, paid review. We currently have a 100% close rate without any initial software purchase before paid engagement.
The Basic Process
You can perform the similar analysis using the standard interface in ChatGPT, Gemini, CoPilot, or any of the dozens of other tools. No matter the tool or platform, the process is pretty much the same and this week is much simpler than last:
There is nothing we upload, but you could easily upload the individual’s job description if one exists. Then, use a prompt similar to below. Note that the prompt will shift by platform and as new or different version are released. You should tweak and adjust to your needs.
Assuming the role of an experienced tax professional and accountant, you provide thorough analysis of financial review and specialize in compensation.
Assuming the following position details, conduct the following analysis:
Position Details:
- Position: Vice-President (40% shareholder)
- Degree in Field: Yes
- Experience: 8 years
- Average Hours Per Week: 45
- Current Salary: $89,000
- Primary Duties: Operations Manager, Oversight of 10 Employees, Basic Accounting
- Non-Standard Position Duties: Assist with Sales
- Company Size: 45 employees
- Company Zip Code: 15213
Analysis:
1.) Please review comparable positions for companies of this size in this zip code, or neighboring zip codes. Write a qualitative summary comparing these positions.
2.) Conduct a comprehensive review of compensation packages for similar positions at companies of this size in this zip code, or neighboring zip codes and provide a details comparison of this position against the average salaries, minimum salaries, and maximum salaries you located.
3.) Do you believe this individual is currently receiving reasonable compensation? Provide a Yes or No answer and then explain your reasoning.
Provide citations where possible. Please humanize all of your responses to a 10th grade level of comprehensive and speech. Additionally, think about your responses a second time prior to creation. Finally, if anything is unclear, please ask questions.
Given that we use an API, we format the returned response into a clean PDF for each client. You could simply modify the prompt to request the response in a formatted version to your layout and liking. And, obviously, once we receive the response, we still review it for accuracy (but that is a conversation for another day).
Sample Output
While the output is comprehensive, it is also, quite long. Here are some sample outputs you may receive:
Reminder that the prompt is thinking a second time:
Initial Review of the Role
Detailed Salary Comparison
Qualitative Findings
This is just partial output, but you can see the analysis is detailed and can provide significant insight.
What Would You Do?
We hope you are enjoying Beyond the 10-Key. Now, we would love to hear your thoughts? How would you adjust the prompt for your needs? What scenarios would you use a preliminary reasonable comp audit?
Thanks so much!
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