Lately, technology seems to be advancing at an astonishing rate, and it can be tough to keep up. If you happen to run your own business however, staying up-to-date with the all of the goings on in the tech world is not merely suggested, it is practically considered a necessity. Sure there are some industries that may be more reliant on technology than others, especially accounting. When it comes to accounting, mistakes are simply not an option and you must have speed and efficiency on your side.
By implementing certain forms of modern technology you actually have the potential of greatly enhancing your accounting business. Accountants have to perform a wide range of services, based on everything from providing simple advice and guidance, to filing taxes and tracking business expenses and receipts. Many in the accounting world therefore, are looking for ways of enhancing their services, and with Blockchain, they may very well have found their solution.
What is Blockchain? – Though the term perhaps sounds unusual to some of you, Blockchain is considered by many, to be a form of tech that is revolutionary, in every sense of the word. Blockchain is basically a type of digital record which records each and every single transaction carried out with cryptocurrencies, the most recognizable of which will probably be Bitcoin. Every single ‘block’ in this digital chain is comprised of digital coding that contains date regarding the transaction.
This data is then recorded, in chronological order and will join the next transaction ‘block’ on and on, forming the Blockchain. You see, every single transaction is recorded and will have a link to the previous transaction carried out before it, along with a timestamp detailing the date, time, and year of the transaction. It is basically a digital accounting leger, with the added bonus of being virtually 100% secure.
The benefits of Blockchain in accounting – Now that we’ve provided a brief overview of what Blockchain is, we’ll now look at some key ways in which Blockchain tech can benefit the accounting industry:
Blockchain is incredibly secure – First and foremost, when it comes to accounting, Blockchain instantly proves its worth because of its security. You see, as all entries into this ‘ledger’ are sealed cryptographically and distributed, it will be virtually impossible for an individual to falsify them, or destroy them. This means that, when it comes to business accounts, Blockchain makes it virtually impossible for an individual to commit, or suffer from, fraud.
Blockchain will automate the auditing process – When it comes to accounting, auditing is, by far, the most time-consuming and complex part of the job. By implementing Blockchain technology however, auditors would be able to automatically verify the most important data behind a business’ financial statements. This basically means that a great deal of time would be saved on performing the audit, not to mention the fact that costs would also reduce as well.
Blockchain is traceable – Another great thing about the Blockchain is that it provides audit trails which are fully traceable. As mentioned, every single transaction utilized via a form of cryptocurrency will be stored on, and will become a part of, the Blockchain itself. Not only that, but there will also be a clear timestamp for that particular transaction, which again, would help speed things up and would simplify things greatly.
Check out this insightful infographic by GetApp:
Cover image: Storyblocks