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How Blockchain Technology Will Affect Accounting
Posted On: Nov 2023
Every accountant today wonders how blockchain technology will affect the future of accounting. Remember, the accounting profession analyses financial information before using it to allocate financial resources. Blockchain technology, on the other hand, allocates financial resources while keeping a ledger of the same.
The two are, therefore, related. By reconciling ledgers, the technology increases the efficiency and cuts the cost of accounting. So instead of wasting time on ledgers, accountants are free to focus on other matters. How else does Blockchain technology affect accounting?
1. More Security and Privacy
Modern accounting relies on the internet – a public resource that’s neither secure nor private - to transfer information. As a result, hackers can access this information. And since the internet has no viable alternative, the profession has one choice left: It must address the problem.
But how? Doing so means accounting must create its own secure, private space within the internet. Is this even possible? Through blockchain technology it is.
No one can hack into the technology, for to do so, one must first overpower all the computers in the blockchain network. Doing that is equivalent to taking over the internet - an impossibility. Distributed ledger technology can allow all the nodes to operate independently on the network and verifying actions all at the same time, making loss of data nearly impossible as well. Information can be encrypted and distributed to various nodes allowing for a more secure transfer and storage of data.
2. More Internet Value
We primarily use the internet to exchange information. In fact, that’s what it's developers had in mind when they created it. But can we add value to the internet? Can we make it more than an information superhighway as it’s so-called? Yes, through blockchain technology, we can.
Instead of using the internet to transfer information, the technology transfers assets through financial transactions, both payable and receivable. To do this, it verifies payments, verifies transaction dates, and allows collaboration between the parties involved. As a result, experts have named it The Internet of Value.
3. More Business Opportunities
As mentioned earlier, blockchain technology relieves the accounting profession of keeping the ledger, increasing the speed and efficiency of an accounting audit. As a result, it allow accounting firms to work faster and to serve more clients – in short, to take advantage of more business opportunities.
4. More Study Opportunities
Wise accountants know blockchain technology is, indeed, the future of their industry. In particular, they know they need skills on the technology. So, they’re flocking back to accounting schools, such as New England College. New England College’s online program and other faculties are turning towards adding blockchain as part of their curriculum to meet the new demand, not to mention that it could become ubiquitous sooner than later.
Blockchain technology will affect the accounting profession in many ways. It makes accounting procedures more secure and private, makes the internet a financial transaction network and its speed and efficiency allows accountants to take advantage of more business opportunities.
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