Blockchain may soon drive business worldwide
Blockchain technology was first introduced as a way to secure digital cryptocurrencies, like Bitcoin. But now, nearly a decade later, companies are starting to see other possible applications, particularly in the accounting industry. 415 Group Supervisor Phillip Hann explains the potential impact.
I saw an article in Forbes that called blockchain ‘Wall Street’s most game-changing technology advance since the internet,’ and it’s true. Blockchain has so much potential for the accounting industry.
With this technology, there are no middlemen. No reconciliation. No corrupt date. No need for month-end cycles. No need to bring together all the different books and records of departments and counter-parties. That’s the promise of blockchain accounting.
It can provide a more transparent and durable framework for us to track and measure assets. It can also make it easier to understand what assets are available in real-time.
This increased transparency will be a good thing for clients and providers alike. The only people who are likely to lose out are the ones who are cutting corners and whose services aren't up to date. Those who are fully compliant and quick to adopt new technologies will come out on top.
Blockchain could allow for ‘smart contracts,’ which are essentially computer programs that execute under certain conditions. Think of an invoice paying for itself after delivered goods have been received. CFOs could benefit from these smart contracts, whenever they have repeating business deals and frequent transactions between multiple parties.
The challenge is this technology is in its infancy, so it’s at a relatively higher cost. But looking ahead, the accounting profession could look a lot different in five years. Some firms believe that blockchain could end up supplanting the modern double-entry accounting. While it could definitely be an industry disruptor, I believe there will always be a need for human accountants and auditors. But it’s exciting to see how this technology will advance our profession.