We have already looked at the impact of blockchain in the medical field. Unlike the medical field, the accounting and auditing industry is starting to fear blockchain as they see it as a technology that may end their relevance.
First, let us first define accounting, and according to Investopedia, it is the processing of logging into financial ledgers, viewing, auditing and monitoring the process.
In essence, this is what a blockchain does only with certain advantages:
- Faster: with the blockchain system accounting will be much faster as there will be no intermediary. Since the whole process is digital, it will be done in real time.
- More accurate: with no human involvement in the possibility of errors is significantly lowered
- Lower cost: large accounting firms take home significant fees for doing accounting services. But with the blockchain system, the transaction is only between two parties hence no cooperated middleman bringing home a hefty paycheck.
- More trustworthy: with the blockchain system more open and every transaction clearly seen the process is more likely to be more
- Trust worth: As you can see the blockchain system clearly has superior attributes to conventional accounting. But just as we have not seen the email industry destroying the postal service it is unlikely that blockchain will ruin accounting firms. However, the accounting industry will experience change
Change in role
With Blockchain tech having the characteristic of being decentralized accounting firms may come in as consultants or overseers. As much as we hate it in business, overseers make proceeding more predictable and hence a sense of stability. It may not be more stable, but an overseer ensures that the company looks more stable…. Business Theater if you will!
For that reason, companies will still go to accounting firms to act as overseers of their ledgers and business transactions. Auditing firms may also come in as advisors and business forecaster.
As much as blockchain solves the security and speed of accounting, it cannot do what many accountants pride themselves in, and that is advising and predicting a client’s business growth.
Incorporate blockchain in accounting
Embracing the change is the most likely outcome in the accounting industry. By now people have learned that technology cannot be stopped and the only way to succeed is by joining it. Uber is an excellent example of an instance that their competitors resisted tech, but in the end embraced it because the market embraced it. The people took to Uber like a duck to water, in Britain black Cab resisted, but in the end with more people swaying to Uber had to embrace the company and use their own app to tackle it.
This is what I think Accountants will do. They will either embrace blockchain tech and use it as part of their service or create a new form of tech to the rival blockchain. Either way the market, and the consumer wins.
But if you are running an accounting or an editing firm do not disappear just yet. It will be a long time before Blockchain is integrated to any business sector. Predictions are the medical market will get priority if indeed blockchain is combined with anything other than cryptocurrency. Plus the need for human communication in a business transaction means that the business community will not quickly embrace blockchain technology.