How Will the Internet of Things (IoT) Affect the Accounting Profession?

Wikipedia defines the Internet of Things (IoT) as –

“A system of interrelated computing devices, mechanical and digital machines provided with unique identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.”

Confused? With this definition, IoT seems like a high-end technology that is far beyond the reach of individuals like us. However, the fact is that we use the IoT devices regularly in our normal routines.

A good example of this would be the smartwatch that you use to keep track of your activities, the number of calories burnt, and the sleep cycle, among a wide range of other features.

The smartwatch is directly connected to your phones and keep transferring the data in real-time. The smartphone can then analyze the data to check your health status. It can further be connected to your thermostat, instructing it to set the right temperature.

Hence, any device connected to the Internet and capable of transmitting and receiving data can be considered as an IoT device. The Internet of Things has started capturing the imagination of the world due to its significant applications.

Every enterprise in the world is adopting IoT in their business process. According to Gartner, the enterprise and automotive IoT devices are expected to rise to 5.8 billion by 2020.

Like all other industries, The Internet of Things is all set to transform the accounting industry as well. It can help in the automation of core processes by efficient collection and processing of information. Here are some of how IoT can affect the accounting profession.

1. Better Decision-making

The accountants in advisory roles need to make important financial decisions for their clients. They make these decisions on the basis of in-depth data analytics, business patterns, and market research. The accountants are responsible for drafting strategies for growth and the business’s secure future.

IoT, along with technologies like AI and cloud, can help accounting professionals take informed business decisions. An IoT device can collect the real-time data that it can transmit to the cloud servers for data analysis and process automation with the help of AI.

For instance, the IoT device (like your smartphone) can send updates about the latest tax laws or government reforms automatically to the cloud. The data can be further interpreted, and decisions can be made accordingly.

2. Streamlining Accounting Operations

The accounting process involves the collaboration of different departments for the collection of financial information. This information is collected by the departments and sent electronically or manually to the accounting departments for bookkeeping.

However, any misinformation or delay in the transmission of data can hamper the accounting process, and lead to inaccurate financials.

Wouldn’t it be great if any financial transaction done by a department automatically gets registered with the accounting department?

For instance, on buying an office chair, the admin department scans the barcode on the chair, and all the details get transmitted to the database of the accounting department. This would streamline the accounting workflow as all the payments, invoices, and bills would be received by the accounting professionals without any human intervention.

3. Minimize Auditing Efforts

Auditing is one of the most familiar processes of the accounting profession. Every business gets itself audited periodically to find any anomalies in the finances or to detect fraud. However, most businesses start digging through their finances only when the audit is near. Consequently, they find themselves buried in a sea of paperwork.

With the help of IoT, all the transactions can be tracked and sent to the accounting department in real-time. Hence, if you have made a donation, completed a purchase, or received a sum of money, the accountants know about it already.

This streamlines the accounting process to the extent that the efforts made for an audit get minimized significantly. This also leads to an error-free accounting process.

4. Efficient Workforce Management

Managing accountants and keeping track of their activities is paramount to every accounting firm. Moreover, it can be quite difficult to know about an accountant’s whereabouts all the time as they have to meet up with their clients regularly. The accountant’s themselves want to track their performance to improve their process and optimize their efficiency.

IoT makes it possible for accountants to track their efficiency during the day. The IoT devices can tell you the hours you have been the most alert and the most unproductive. Hence, it helps you work accordingly and get the most out of your day.

This data can be sent to the employer in real-time who can track your performance accordingly. In addition, with IoT, employers can also view your health condition and offer you with benefits.

Final Note

IoT is slowly but surely transforming not only your homes but also the offices. Sighting the hectic nature of the accounting process, IOT will come as an aid to cut down the time in managing data and the efforts to distribute information.

Want to know more about the right solution for your accounting process? Get in touch with our Solutions Consultant at 855-223-4887.