One of our friends just wrote a quite enlightening article on Fintech and accounting firms' gain of productivity.
Here it is below, by Byron Chan of Yau & Wong CPA, RCIC
( www.yauandwong.com )
How Fintech is Changing the Way Accountants work
There’s an old saying often attributed to the Greek philosopher Heraclitus that goes “The only constant in life is change”.
The accelerating rate of change will have immense impact on the way humans
work, but the debate on how exactly technology will affect productivity
is still ongoing. As finance professionals, the ability to adapt and
evolve with technological advancements will separate the winners and
losers.
So, how has the accounting industry been affected so far?
1. The Automation of bookkeeping and data entry:
Most modern ERPs have automation tools that automatically import sales and
expenses straight into the general ledger. Even cloud-based monthly
subscription software like Xero and Quickbooks provide small businesses
with automation tools at extremely low costs.
While it is true that the automation of data entry has led to a great deal of
job loss, it has also elevated the perception of the skillset of an
accounting professional.
2. The Evolution of Payment Cycle Processes:
The advancement of fintech in the payment cycle industry has significantly
transformed the way businesses transact with vendors and customers. The
entire process has been streamlined and accelerated in the last few
years, especially for B2B businesses. Invoices are digitally generated,
virtually approved, then digitally sent to customers.
Payment platforms like Stripe and PayPal have also transformed the way companies transfer funds.
3. Blockchain Accounting
Blockchain Accounting has become a hot topic in the past few years, but what is
it? Through the use of a distributed blockchain ledger, a company can
record its financial transactions straight onto the blockchain in
chronological order, eliminating the need for the centuries old and
trusted double entry method.
A blockchain general ledger would be decentralized and completely
transparent, allowing all participants of the ledger to have a copy of
the entire ledger containing all historical transactions, including
stakeholders and regulators. Blockchain ledgers are also immutable,
meaning that once a transaction has been recorded, it cannot be tampered
with. The implication of widespread adoption would mean the elimination
of most audit processes and regulatory work.
To conclude :
As leaders of our organizations, we have an obligation to stakeholders to
continually evolve. Jack Welch once said that “If the rate of change on
the outside exceeds the rate of change on the inside, the end is near.”
How we respond to the changes in our industry will shape our futures,
and will empower the adopters and leave the laggards behind.