The story behind the name of the bitcoin and blockchain technology is fascinating. Even more compelling is the wide-ranging application of the technology. For accountants and auditors, blockchain has the potential to dramatically alter the set way of going about business, especially when combined with other innovations such as machine learning. Because accounting records contain highly structured sets of data, this technology is perfectly suited for the profession. Professionals who are not at the forefront of learning and testing ways to adopt these technologies risk getting left behind.
While blockchain was created to facilitate bitcoin, the technology now extends far beyond the world of cryptocurrency. An important facet of blockchain technology is that it is decentralized, eliminating the middleman. Rather than storing data in one location, blockchain technology shares data across a massive peer-to-peer network. Until now, we have relied on institutions or trusted third parties, such as banks, government registries, and other intermediaries, to be in the middle of our transactions to create validity.
Accounting firms and corporate accounting departments should start not only learning how to take advantage of the technology, but also testing new ways of working internally with their teams and externally with clients. Starting small with expense reporting or document collection applications can be a way to gain confidence in the benefits of utilizing technology like this before taking on larger applications like general ledger systems.
Everyday data-entry tasks are poised to become much easier, freeing up time for accountants to focus on analysis and insights. Accountants and firms that develop these skills now will be able to differentiate themselves as the technology becomes widespread. The days of offering value simply through accurate data entry and calculations are numbered, so taking the time to retool now and work on your advisory skills is an investment in the future of our work. By eliminating reconciliations and providing certainty over transaction history, blockchain could also allow for increases in the scope of accounting, bringing more areas into consideration that are presently deemed too difficult or unreliable to measure, such as the value of the data that a company holds.
The blockchain technology promises a lot of advantages for the accounting firms whether big or small, such as reduction of errors, time, cost and fraud, increased efficiency. Blockchain as a source of trust can also be extremely helpful in today’s accounting industry. It can be gradually integrated with typical accounting procedures: starting from securing the integrity of records, to completely traceable audit trails. This will lead to a future where the fully automated audits will become a reality.
Accountants can transform how blockchain will be used in the future and how the development of blockchain-led solutions and services take place.
As blockchain development infiltrates the accounting industry, regulators, technology providers, and accounting industry leaders must work together and seek ways to make the transition beneficial for all parties. Accountants are not engineers and might not have the detailed knowledge of how blockchain works. But they will need to know how to advise on blockchain adoption and consider the impact of blockchain on their businesses and clients.
