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Blockchain Is Not A Threat To Accounting, It’s An Opportunity
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Blockchain Is Not A Threat To Accounting, It’s An Opportunity

Blockchain is the new buzzword in virtually every industry – banking, investing, healthcare, education, insurance, real estate, government, travel, etc.

While it is best known for its underpinning of the cryptocurrency phenomenon, the technology itself has far wider applications, and industries are poised to incorporate it into their business processes. It provides an incorruptible ledger of identities, transactions, documents, assets, etc., and thus offers a new way to record, store, and share data of all kinds.

Blockchain potential for the accountancy industry

Blockchain itself can be seen as a technology based on accountancy. It records and stores assets, liabilities, transactions, and provides methods of recording cash flow and reconciling accounts. It’s a “natural” for the accounting industry which to date has relied on paper trails and even cloud-based technology to perform accounting functions and transactions and to ensure that regulatory requirements are met. It’s cumbersome indeed, but auditors require these paper trails as they come in to review the “books.” And, “cooking those books” has always been an issue. No one will ever forget the Enron tale.

Because blockchain provides an immutable and transparent record of all accountancy-based data, it offers an opportunity for accountants and CPA firms to streamline their processes and audits, while ensuring that the records are accurate and truthful. This is an amazing improvement over traditional accountancy procedures that can be fraught with errors and fraud. Blockchain technology has taken the world by storm, it has been adopted by big business giants, even legacy tech startups like Ibinex, a cryptocurrency exchange white label solution provider, have started to adopt this revolutionary technology.

So, do accountants need to fear for their jobs?

The short answer is no. Whenever a new technology arrives, there is worry about its danger to job-holding individuals who are impacted by it. And there has been some cause for concern in some industries. Consider, for example, the declining role of investment brokers, now that individual consumers have access to all of the data they need to make investment decisions.

But while blockchain will certainly disrupt the accounting industry, the task responsibilities of accountants will largely remain intact. However, by adopting blockchain technology, accountants and accountancy firms will be able to offer their employers and their clients the safety and security of all records – records that can be accessed by auditors and others who “need to know” (e.g., the SEC).

And so, the accountant’s role will change, but it will not be eliminated. Information must still be interpreted and categorized correctly before it is entered into the blockchain, and it will fall to the accountant to do this as well as implement and maintain the blockchain.

And how about bookkeepers? Those individuals who must accurately maintain the transaction records? Are their jobs in jeopardy? The answer is again a No. Someone has to oversee accounts receivable; someone has to oversee contracts for payments for goods and services; someone has to prepare invoices; someone has to track income and outflow. Even with blockchain technology, someone has to enter contracts, purchase orders, and payments into those blocks. What this new technology will provide is efficiency, record permanency and transparency, and that is a bookkeeper’s dream.

Early use cases of blockchain in accounting

The promise of blockchain technology has resulted in an abiding interest by major accountancy firms in its potential uses.

“Thanks to blockchain, recording and timestamping of documents will render all accountancy events permanently memorialized and immutable,” Ricky Ng, founder and chairman of i-House.com. “Documents can not be modified over their life cycles. Business processes that span multiple departments or even companies are recorded and fully traceable.”

Also, smart contracts can result in such things as invoices being paid automatically once receipt of goods has been verified. Audits can be far more automated without having to pour through paper trail documents. Auditors will be able to verify key data underpinning financial statements, thus reducing both cost and time for the payer of the audit. Regulatory compliance can be verified far more efficiently.

For these reasons and more, the big accountancy firms are investing in a full exploration of the applications of blockchain. If they can offer their clients greater speed and accuracy, then they will retain the competitive edge.

And individual accountants looking for positions within smaller organizations will be far more marketable if they have completed some of the blockchain technology courses that are now being offered by college accountancy programs.

The bottom line? Embrace it and win

Blockchain technology is already disrupting a number of industries, and it is here to stay. Though in its infancy, its applications will only continue to increase. But will it make accountants irrelevant? No, but it will change the way in which accountants do their work – much like computers have continued to change the ways in which everyone does work.

So, embrace this new technology. Get “schooled” in it; promote it to clients and potential employers. You don’t need to understand the intricacies of the technology – that’s for developers. You need to understand how to use it to your employer’s or your clients’ advantage – this keeps you relevant and in demand.

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