When I speak at accounting conferences, one question that comes up quite often is what technology will have the biggest impact on how accountants do their jobs. That can be a tough question, not because I don’t have strong opinions on the matter, but because it’s not just about one technology.
I believe the most significant impact on how accountants do their jobs will be the convergence of several emerging technologies, starting with two that give us an enormous amount of data:
The Internet of Things (IoT). The Internet of Things comprises devices that connect to the internet via Wi-Fi, Bluetooth, or cellular data connections. It includes everything from toasters to fitness trackers and refrigerators to industrial machinery. While the chip shortage continues to impact the number of connected devices, the number of global IoT connections is still growing. According to IoT Analytics, there were 12.2 billion active endpoints in 2021, and they predict that by 2025, there will be approximately 27 billion connected IoT devices. The amount of data shared by all those connected things is massive.
Blockchain. Blockchain systems include an append-only cryptographically secure ledger of transactions. Software-driven consensus ensures transactions are only added to the ledger if the system validates them. This immutable ledger, where transactions are virtually impossible to change, gives us levels of transparency and information about transactions we’ve never had access to.
When you take these two data sources and throw them into cognitive systems like machine learning, artificial intelligence and robotic process automation—truly intelligent systems—big things are possible.
For example, let’s look at how the Internet of Things is already impacting inventory audits. Right now, cloud-based inventory systems track items in real-time. Products have RFID tags or barcodes so they can be scanned and identified by the system, giving us visibility into inventory levels, item location and more.
The IoT will give us an even greater ability to track and communicate with those products. RFID tags will hold even more information about an item, collect data about its status and surroundings like temperature, damage during transit, etc., and communicate that information to an inventory system. Every object will have a unique identifier, and built-in GPS will allow us to know exactly where every item is. We’ll be able to pinpoint every item or piece of equipment, in real-time, from anywhere. We no longer need to physically be somewhere to know what we’ve got and what it’s doing.
You don’t need to look too far to find a discussion on how blockchain will impact the accounting profession. With blockchain, we can see both sides of a transaction and analyze a complete data set in less time than we’re currently able to analyze a sample of transactions.
Having access to more data faster will change how we do audits, but it won’t eliminate the need for audits of financial statements. Verifying the occurrence of a transaction is just one of the critical aspects of an audit. Auditors will still have work to do but focus less on hindsight and confirming past transactions in favor of taking a closer look at how businesses are operating today so we can provide more foresight and better advise clients on how to impact the future of the company.
A lot of what we do today will be automated, but it will really change our focus from transactions to the pieces of business that aren’t just about the numbers—things that pull at the heart of a person. After all, organizations are made up of individuals with desires and motivations beyond what is the best financial move. You might be working with a business owner whose numbers tell you one thing, but you know it’s a family business, and the owner wants to pass it down to the children. That personal knowledge changes how we advise our clients, and it’s a piece of the relationship between an accountant and a client that a machine can’t have.
The convergence of emerging technologies will profoundly impact how accountants do their jobs in the near future. It will force us to adapt our skillsets and mindsets to new ways of thinking and working with clients. These technologies will also help us save time, reduce costs and offer new, more personalized services. This is an opportunity to redefine our roles as trusted advisors, build valuable relationships and provide actionable, next-level service that ensures the success of our clients and our firms.
Amanda Wilkie, Consultant at Boomer Consulting, Inc., has a computer science background, but she’s not your average geek. With two decades of technology experience, Amanda has spent 13 years driving change and process improvement through innovative technology solutions working across firms of varying sizes in the public accounting profession. She has held strategic leadership positions in firms ranging from Top 50 to Top 10 including her most recent role as CIO of a Top 30 firm. Amanda is a recognized expert in the profession who regularly speaks and writes on blockchain and cryptocurrency and their impact on the profession.