Question

Technology is changing the way accountants do their jobs. Find an article about an emerging accounting technology (for example, blockchain, data analytics tools, cryptocurrency, etc.). Post a link and discuss what you learned from the article. Based on what you learned, what steps can you take to prepare for that technology?

Answer 1

Accounting technology is a business major that can be taken in junior and community colleges, and the curriculum introduces students to many aspects of the business world. These include finance, management, business law, databasing and accounting.

Almost half of the nearly 17% of small businesses in North America that don’t currently use accounting software plan to adopt it within the next one to two years, according to our 2018 Top Technology Trends survey of more than 700 U.S. small and midsize business (SMB) leaders.

• It’s a wise decision.
• The time saved each week by using accounting software at your SMB could save you thousands upon thousands of dollars per year.

While basic accounting software (accounts payable and receivable, invoicing, and payroll) can help keep your business afloat, investing in the next generation of accounting software featuring emerging technology can help you leapfrog your competition.
The future of accounting software will see more seamless, useful integrations, foolproof automation, and revolutionary analytics.

1. More, and better, accounting integrations

The old problem:

• There are dozens of integrations available for your accounting software, but they’re buggy, and often the one you really need isn’t available.
• Let’s say you find the perfect new mobile payment app, only to learn that the integration you need to pull payments directly into your accounting software won’t be available for years because the developers aren’t on the same page.

The new solution:

• Established software vendors are working closely with upstart app developers to grow their digital ecosystems.
• One of the most important things to consider when selecting accounting software is how it will work with your existing business software (e.g., your CRM for invoicing, project management for budget tracking, and time tracking for payroll).
• As we pointed out in our accounting software buyers guide, there are thousands of apps and integrations that can turn your out-of-the-box accounting software into a powerhouse of efficiency and financial management. And while integrations are nothing new, you can expect to see even more seamless integrations in the coming years.

2. Accounting automation that is actually automatic

The old problem:

• You can automate simple accounting processes such as payroll, but with all the upfront work and programming it takes, you may be better off doing it manually anyway.

The new solution:

• Robotic process automation tracks a human worker performing a basic accounting process such as payroll, then—through AI and machine learning—learns the rules so that it can take over the controls and repeat the process, perpetually.
• Automation is great. It’s vacuuming our homes and driving our cars, and soon it’ll be doing our business accounting.Now, you might be thinking: “But my accounting software already offers automation for things like error-checking and running payroll each week.” And you might be right.
• But if you’ve ever thought, “This automation is great, but it sure took a lot of work to get it running just right,” wait until you see robotic process automation.

3. More insightful accounting analytics

The old problem:

• You have tons of accounting data—years, or evens decades, of records of the money flowing in and out of your company—but it’s just an impenetrable pile of numbers.
• You have no idea what insights you should be looking for, or what business actions to take based on that data.

The new solution:

• Emerging analytics technology will tirelessly parse your data behind the scenes, delivering actionable insights to your desktop, and correlating your financial data with external data extrapolated from the world at large to provide new context.
• Analytics in accounting software go back at least a decade, but until recently have only scratched the surface of the meaning behind the numbers. Analytics that predict increased product sales in December because they increased last December aren’t particularly insightful.
• Your small business accounting software is teeming with data on sales, customers, expenses, payroll, and more. The key to growing your business is hidden somewhere in that data.

Blockchain Basics

• Blockchain is also known as distributed ledger technology (DLT) — which is, perhaps, the simplest definition of what blockchain is. In conventional accounting, records are stored in a centralized location, be it a collection of spreadsheet files or the database of an accounting software application.
• The accountant enters each record, and performs whatever actions are necessary to serve the client’s needs. When information about the records is needed by regulators or clients, the accountant must retrieve whatever data is needed and provide it to the requesting party. Generally, only the account and auditors have direct access to the centralized ledger.

EXAMPLE:- Four large accounting firms, Deloitte, Ernst & Young, KPMG and PwC, are already investing heavily in DLT technology, and Deloitte has at last 30 blockchain prototypes up and running.

With companies like Amazon and IBM offering robust, flexible, and scalable blockchain platforms, it is only a matter of time until accounting services emerge on those platforms. We can expect to see innovation in this area to be both fervent and fruitful in 2018.

Cryptocurrency

• Cryptocurrency is a type of digital token, and is designed as a medium of exchange.
• Cryptocurrencies, including Bitcoin, are generating a significant amount of press given their rapid increases in value and extreme volatility. Because of this volatility, the value of Bitcoin in circulation has recently fluctuated between $100 and $300 billion
• Under the current US accounting framework, cryptocurrency is not cash, currency, or a financial asset; rather, it should likely be accounted for as an indefinite-lived intangible asset. The implication of this model is that declines in the market price of cryptocurrencies would be included in earnings, while increases in value beyond the original cost or recoveries of previous declines in value would not be captured.

How are cryptocurrencies obtained?

• There are two general methods by which cryptocurrency is obtained:
• Purchased or received from a counterparty directly or through an unregulated exchange; or Created through a process called mining. “Miners” are rewarded with cryptocurrency units when they successfully solve complex mathematical problems that allow for the addition of a group of valid transactions (i.e., a “block”) to the distributed ledger (i.e., the blockchain).

Data analytics

Accounting analytics, in a nutshell, is the examination of Big Data using data science or data analytics tools to help answer accounting-related questions.Accounting analytics, in a nutshell, is the examination of Big Data using data science or data analytics tools to help answer accounting-related questions. Let’s break that down further.

The Emergence of Big Data the first piece of the puzzle is `Big Data.’ Big Data is different from previous forms of data in terms of volume, variety, and velocity: There is a lot more of it, it comes in a variety of structures and formats, and it is updated and produced quickly. Any of the following might be considered sources of Big Data for an accounting analytics project:

• social media data
• web search data
• journal entries
• transactional data (e.g., customer transactions)
• call center transcripts
• store videos, web cams, etc.
• online customer reviews

Steps can you take to prepare for technology

.1. Get on the cloud

Perhaps the most important cloud benefit is the anytime, anywhere access to data and computing resources it provides. When you give your clients cloud-based access to real-time financial reports, they can make operational decisions based on up-to-the-minute information from their accounting system. Cloud technology also allows you to provide constant monitoring, rather than intermittent analysis whenever information is shared with you.
2. Understand automation

Perhaps the biggest sea change facing the accounting profession is the arrival of computational power that could make data entry obsolete. Artificial intelligence (AI) is the technology leading the charge in this regard. All of the Big Four firms are already using AI in varying ways. In the news, one of the most frequently discussed use case scenarios for AI is the self-driving car. You put an address into a GPS program, and the car's AI calculates the best way to get you there based on factors such as driving patterns, wait times, and accidents.
3. Start considering cryptocurrency

Whether or not you have decided to invest time in learning the details of bitcoin, there's no denying that blockchain-based, decentralized cryptocurrencies will continue to play a major role in financial markets. As more and more businesses begin accepting these alternative currencies as readily as they do good old-fashioned dollars, having crypto-friendly services will become more and more valuable.

Merchant accounts, of which Coinbase is the most popular, give you the flexibility to accept payments in bitcoin or other cryptocurrencies, like ethereum, without having to assume the risk that comes with these new, volatile forms of currency. When you use a merchant account, you can instantly convert all payments received in cryptocurrency into dollars.
4. Keep learning and communicating

This piece of advice is evergreen, but it's especially relevant in a changing professional environment. As we have seen in the evolution of technology, it is not going to slow down, and we can no longer deny that future developments are going to affect the profession.

WHAT I LEARNED FROM THE ARTICLE

The ever-increasing power of digital technology won't replace accounting professionals, but it will change the nature of our jobs Technological innovation has led the way in how accounting is done nowadays. Digital resources and online tools improve productivity and organisation. Manual accounting has virtually disappeared and has been replaced by electronic accounting. This has not only reduced errors but provided, at the same time, better and more accurate reporting amongst other advantages.