Blockchain and early uses in Accountancy
Blockchain technology has resulted in a surge of interest from major accountancy firms all with an enthusiasm for how they could adopt its many potential uses.
The current use of technology in accountancy is still way behind when compared to other industries. The reason for this is more than likely due to the fact that there are exceptionally high regulatory requirements and that the accounting system is built so that forgery is impossible, or at least very costly. To achieve such an impregnable system, historically, the industry has relied on manual control mechanisms, a paper-chain based approach, double accounting, duplication of efforts and protracted documentation. All of which means it’s a very labour-intensive process and far from automated.
Blockchain has the potential to make dramatic changes to this. Blockchain provides the recording and timestamping of documents on a permanent and unchangeable basis. Documents cannot be modified over their life cycles and business processes that span multiple departments or different companies are fully recorded and traceable.
How could companies use Blockchain?
Some of the physical ways in which Blockchain could be used to cover a range of activities. For example, blockchain will make it possible for companies to record their transactions directly into a joint register to create an interlocking system of permanent records. As blockchain distributes and cryptographically seals these records, changing them or destroying to falsify accounts is practically impossible. In fact, the process is like the records being verified by a notary, but in an electronic way.
In addition, this technology can take the form of smart contracts. This would involve an invoice being paid automatically once receipt of goods or services have been verified. Audits have the potential to be automated too without any need to delve through paper trail documents. In turn, this means auditors can get to work quicker and in a more streamlined way, which reduces time and therefore the cost of carrying out the audit. It also means auditors could spend their newly free time on areas such as complex transactions or other tasks.
Due to these potential benefits, large accountancy firms are researching and exploring the applications of blockchain in the hope that they can offer their clients improved speed and accuracy.
Individual accountants should do the same, or at least research the technology and keep up to date with how and when it will enter the industry. An accountant with some understanding of the technology will be far more valuable than one without.
Quite simply, embrace it as we think it’s here to stay. It is still in its infancy but, it will continue to grow. It will without a doubt change the way in which accountants work, but for the better. So, take advantage of this new technology. There are already courses on the subject, so enrol and learn. You won’t need to learn or understand the actual technology as that’s the developers’ job, but you do need to know how to use it to your advantage, which will give you the competitive edge.
At TD group, we often advise our clients and candidates where the next big thing is coming from and those leading the way are often the ones that secure job or in the case of the clients, the best candidates applying. For more information on careers in finance and accountancy please contact me at firstname.lastname@example.org