Buchprufer Consultants LLP

Accounting has long been influenced by digital technology, although the majority of that technology has included swapping analogy instruments out for similar digital ones. The new technology of blockchain fundamentally changes accounting.

Blockchain is an accounting technology. It is concerned with the transfer of ownership of assets and keeping a ledger of correct financial data. The measurement, communication, and analysis of financial data are areas of focus for accountants. A large portion of the profession is concerned with determining or calculating rights and obligations over property or with strategizing the most efficient use of financial resources.

Benefits of blockchain in Accounting

Increase efficiency for accountants by bringing clarity to asset ownership and the existence of obligations.

Enable accountants to understand the resources of their organizations and free up resources so they can focus on planning and valuation rather than Recordkeeping.

Lowers the expenses of maintaining and reconciling ledgers and offering perfect certainty over asset ownership.

Encourage an increase in transactional-level accounting, as it coincides with other automation developments like machine learning.

Broaden the scope of accounting by considering more areas that are too difficult or unreliable to measure the value of a company’s data.

Implications of blockchain for Auditors

  • Blockchain can be used in external auditing. Confirming a company’s financial status becomes less important if some or all of the transactions underlying that status are visible on the blockchain. This idea would result in a significant shift in the way audits are conducted.
  • When integrated with suitable data analytics, a blockchain system could assist with the transactional level claims necessary in an audit, allowing the auditor’s expertise to be better spent on higher-level questions.

For instance, auditing involves not only examining the financial details of a transaction and the parties involved but also how the transaction is recorded and classified. If a transaction credits cash, does this outflow result from costs of sales or expenses, from paying creditors, from producing assets, or from some other source? With blockchain in operation, the auditor will have additional time to concentrate on these matters because many of these judgement elements require context that is unavailable to the broader public and instead requires knowledge of the firm.

How blockchain can advance the accountancy profession

  • The transition to a financial system with a major blockchain element opens up numerous prospects for the accounting profession. Accountants are experts at maintaining records, applying complex rules, establishing standards, and establishing business logic. Developing blockchain-driven solutions and services will allow them to shape how blockchain is embedded and used in the future.
  • For blockchain to become an integral part of the financial system, it must be developed, standardized, and optimized. There are numerous blockchain applications and start-ups in this industry, but only a few have progressed.
  • Accountants can also serve as advisors to businesses considering joining blockchains, advising them on how to assess the costs and benefits of the new system. Accountants’ combination of commercial and financial acumen will position them as crucial advisers to organizations seeking possibilities in these emerging technologies.

Skills Necessary for the future

Blockchain and smart contract techniques will alter areas of accounting dealing with transactional certainty and the transfer of property rights. Many modern accounting department operations can be optimized using blockchain and other modern technologies such as data analytics or machine learning, increasing the accounting function’s efficiency and value.

Certain tasks, such as reconciliations and provenance assurance, will be minimized or eliminated, while others, such as technology, consulting, and other value-added activities, will be expanded.

A deep understanding of blockchain technology or engineering expertise won’t be required for accountants. They must, however, be able to provide guidance on blockchain adoption and consider how blockchain will impact their customers and their businesses. They must also be able to function as a bridge, conducting informed conversations with both technologists and business stakeholders.

How Can Buchprufer Assist?

Buchprufer is a well-known hub for bookkeeping and accounting outsourcing services. Our skilled team guarantees the highest level of quality for account outsourcing services. We can assist your company in lowering operating expenses and tedious administrative tasks. This will support our partners in focusing their attention on key risk areas and organically growing their businesses.