Blockchain: The Next Revolution Coming to Accounting
Blockchain is one of the hottest topics in accounting right now. Despite that fact that blockchain has only existed since 2008, it is being eagerly integrated into accounting workflows and forecasted to radically transform the industry.
It is easy for the concept of blockchain to get muddled by technical details, but it’s actually a fairly simple solution. A blockchain is essentially a form of distributed ledger that is cooperatively managed by users both inside and outside of an organization. Every change to the ledger is meticulously documented, and the information is considered accurate and immutable.
Blockchain currently exists more as an idea than an opportunity, but the underlying technologies are evolving fast. Once blockchain reaches maturity and become ubiquitous within the industry the implications promise to be wide ranging:
Increase Auditing Volumes and Speed
Currently, a huge volume of work is dedicated simply to reconciling and validating transactions. That restricts the speed of audits significantly and limits how much data is able to be incorporated. Since blockchain creates a shared record accepted by all, the auditing process requires much less manual labor and operates with previously unparalleled speed and scale.
Eliminate Errors and Omissions
Blockchain is all about increasing transparency and extending access. Since every addition to the ledger is recorded and the data is very carefully secured, there is no doubt that the information available is perfectly accurate and up-to-date. Issues that arise from data errors like lost revenues and damaged reputations become largely irrelevant.
Focus on Strategy and Value
In many ways blockchain handles the heavy lifting of finance and accounting. More cumbersome workflows are automated, and users have greater visibility and flexibility into their data. That empowers accountants to focus their efforts on crafting strategy and adding value to organizations instead of handling routine data management.
Accounting and finance departments now realize that data is both their biggest asset and greatest liability. Blockchain is fundamentally a way to minimize risks while maximizing opportunities. As a result, the impact of blockchain will extend to procure-to-pay, order-to-cash, record-to-report, and beyond.
It will take time for blockchain to develop fully, but accessibility is already a priority. Rather than replacing existing financial management software, blockchain would represent the layer above it, integrating in-house data with facts/figures from clients, suppliers, and partner organizations. It becomes the link between a company and the resources most necessary for sustainability and success.
If managing your financial data is on you mind, tools already exist to give you deeper insights with less effort. Contact InCloud360 for a free consultation about your data-driven future.