How to Use ChatGPT and Claude for Drawing Power Calculation: A Step-by-Step Guide for CAs
Yes, ChatGPT, Claude or Gemini can help you re-perform a drawing power (DP) calculation, provided you paste the sanction terms and the verified figures yourself and make the model show every line of working. It should apply your margins and cover period, never supply them from memory.
This is the practical companion to Drawing Power Calculation: Stock, Book Debts and Margins Explained for CAs. That post explains the formula and the audit checklist. This one shows how to use an AI assistant on it without getting it wrong.
What can ChatGPT or Claude do here, and what should you never delegate?
| Good uses (AI re-performs, you verify) | Never delegate |
|---|---|
| Applying a formula you paste to your figures | Choosing margins or the debtor cover period |
| Showing line-by-line working and the limit cap | Deciding which stock or debtors are ineligible |
| Comparing DP with the outstanding day by day from a table you paste | Tying stock and debtors to books, ageing and physical verification |
| Drafting an observation once you confirm the numbers | Judging NPA classification or quoting RBI paragraph numbers from memory |
| Explaining why two workings differ | Certifying anything |
Rule of thumb: provide the source, ask it to apply it.
Step 1: Set up a safe workspace
- Never paste borrower or bank names, PAN, GSTIN, CIN, account numbers or the sanction reference.
- Use labels such as "Borrower A", "CC account 1" and "Bank X".
- Use synthetic or rounded figures when practising; keep real ledgers in Excel.
- Use a workspace whose data-use settings your firm has reviewed, and turn off training on your chats where available.
Anonymisation wording is in our DPDP-safe prompt template library for CA firms.
Step 2: Give the AI a role and a boundary
You are an assistant to a chartered accountant re-performing a drawing
power calculation for a working-capital account. Rules:
1. Use ONLY the formula, margins, cover period and creditor treatment I
paste. If any of these is missing, say "not stated" and ask me.
2. Do not quote any RBI paragraph, circular number or threshold unless
it appears in text I paste.
3. Show each line: inputs, subtraction, margin, result.
4. List every assumption and ask before assuming.
5. Never round until the final line. You do not certify; you re-perform.
Reply "ready" if you understand.
Step 3: Paste the sanction terms and formula
Type the terms yourself from the sanction letter, anonymised.
Sanction terms (anonymised):
- Limit: Rs 150 lakh cash credit
- Stock margin: 30%. Debtor margin: 35%
- Stock is taken net of sundry creditors for goods (paid stock)
- Debtors beyond 90 days are excluded
- Stock and debtor figures must be from the latest stock statement
Formula to apply:
DP from stock = (Stock - creditors for goods) x (1 - stock margin)
DP from book debts = (Book debts - debts beyond cover period) x (1 - debtor margin)
Gross DP = DP from stock + DP from book debts
Applicable DP = lower of Gross DP and sanctioned limit
Excess drawing = Outstanding - Applicable DP, if positive
Task 1: Restate the terms as a checklist and tell me any input you
still need. Add nothing that is not above.
Compare its restatement with the sanction letter. A margin that differs from what you typed is an error.
Step 4: Give it the worked case
This synthetic case, in Rs lakh, is safe to paste as is.
Case (synthetic, Rs lakh):
- Stock per stock statement, after excluding old and obsolete: 220
- Sundry creditors for goods: 60
- Total book debts: 100
- Debts beyond 90 days: 20
- Outstanding in the account on the statement date: 155
Task 2: Compute DP from stock, DP from book debts, Gross DP,
Applicable DP and any excess drawing using the terms above.
Step 5: Ask for working and assumptions
Show the full calculation in a table with one row per step. Then list
every assumption you made and every input you would need to confirm
(for example, whether the stock statement is under three months old,
or whether any debtor category is excluded). Mark uncertain items
with [CHECK]. Finally, say in one sentence whether the account is
within drawing power.
Answer each assumption. If you want a day-by-day test, paste a small table of daily outstanding balances and ask it to flag days above Applicable DP.
What a good answer looks like
Our own computation from the synthetic case is below. This is what the numbers must be. Any AI output is illustrative: wording and layout vary run to run.
| Line | Rs lakh |
|---|---|
| Stock | 220 |
| Less: creditors for goods | 60 |
| Paid stock | 160 |
| Less: stock margin 30% | 48 |
| DP from stock | 112 |
| Book debts | 100 |
| Less: beyond 90 days | 20 |
| Eligible debts | 80 |
| Less: debtor margin 35% | 28 |
| DP from book debts | 52 |
| Gross DP | 164 |
| Sanctioned limit | 150 |
| Applicable DP (lower of 164 and 150) | 150 |
| Outstanding | 155 |
| Excess drawing | 5 |
The stock statement supports Rs 164 lakh, but the limit caps drawing at Rs 150 lakh, so the account is Rs 5 lakh overdrawn. A good answer says so and notes that whether this becomes an asset-classification issue depends on how long it persists. That link is explained in the companion post's section on RBI's IRACP norms, which you should check against the current edition.
Where does AI go wrong on drawing power?
- Default margins. It may quietly use 25% and 40% because they are common. On this case that gives 120 + 48 = 168, not 164. Check: compare each margin with the sanction letter.
- Gross stock. It may skip the creditor deduction. Using 220 x 0.70 gives 154 from stock, so the total is overstated by 42. Check: the creditors line must appear.
- Ignoring the limit cap. It may report Gross DP of 164 as available. Check: the applicable DP line is the lower of the two.
- Arithmetic slips. Margins are applied to the wrong base, for example to eligible debts before removing old ones. Check: recompute each line.
- Assumed facts. It may assume the statement is current or the creditor deduction applies. Check: every assumption must be on its list and agreed by you.
Verify in 60 seconds
Open the free drawing power calculator, enter stock 220, creditors 60, stock margin 30, book debts 100, debts beyond cover 20, debtor margin 35, limit 150 and outstanding 155. It should return the same Gross DP, applicable DP and excess as the table above. Use the calculator's PDF as the working paper. If the AI and the calculator disagree, trust the calculator and find the line where the AI diverged.
How do ChatGPT, Claude and Gemini differ for this task?
Only what is generally true:
- All three can take an attached file such as a sheet or PDF. Attach only anonymised copies.
- All three let you save the role prompt from Step 2 so you do not retype it, through custom instructions or projects. Names and plan availability change, so check your account.
- Some can run code or spreadsheets for arithmetic, which helps, but feature availability varies by plan. Even then, verify with the calculator.
The checks above apply to any tool.
Frequently asked questions
Can AI calculate drawing power for me?
It can re-perform the arithmetic if you supply the formula, margins and figures. It cannot verify that the stock exists, that debtors are genuine or that the margins are right. Those come from the sanction letter and your audit work.
Can I paste the sanction letter into ChatGPT or Claude?
Only after removing identifying details, or by typing the relevant terms yourself. Follow your firm's confidentiality policy and the tool's data settings.
Why does the AI give a different answer from the calculator?
Usually because of a wrong margin, a missed creditor deduction or the limit cap. Compare line by line against the table in the companion post.
Should I trust the AI's view on NPA classification?
No. Test classification against the current RBI text yourself and use the NPA classification calculator as a cross-check.
Which margins should I tell the AI to use?
The ones in the sanction letter. Rates such as 25% and 40% are only common practice, not rules.
Does using AI change my responsibility as a CA?
No. You remain responsible for any stock audit report or DP certificate you sign. Keep your working paper and sources.
Last reviewed: 26 September 2026. This post is educational. Confirm terms against the sanction letter and current RBI text before relying on them in a signed report.
CORAA's internal audit product page shows how engagement working papers and evidence can be kept together. To try it, start a trial.