Blockchain is brimming with potential. From hedge funds to forecasting to supply chains, blockchain is making waves in dozens of varying industries, revolutionizing how information is stored and shared. The world of accounting is no exception. Blockchain presents the accounting industry with the technology to provide unprecedented levels of efficiency, clarity, and most importantly security. Here are three ways blockchain is capable of revolutionizing security for an accounting firm.
Cutting Down on Fraud
Compared to traditional accounting practices, blockchain can provide superior protection from fraudulent activity. Due to the decentralized nature of a blockchain-based ledger, modifying financial records is incredibly difficult as changing any one copy of the ledger will not change the consensus. In fact, to commit fraud, one would have to alter a majority of the blockchain ledgers simultaneously. Managing this would be highly infeasible and very conspicuous.
Higher Accuracy and Fewer Errors
Besides intentional fraud, another major concern all accounting firms face is human error. Once again as with fraud, blockchain can significantly reduce data entry mistakes compared to conventional alternatives. By automating most of the process, blockchain increases both the speed and accuracy of data entry.
Despite the best efforts of accounting firms, in the past auditing has been more periodic, rather than an ongoing, perpetual process. This periodic nature can create blind spots. However, blockchain avoids this. Opening the door for truly continuous auditing, blockchain-based audit systems enhance the reliability and extent of data collection, all while reducing the need for labor through automation.
Blockchain is here to stay. The advantages presented by cryptographic technology are too innumerable and impactful to ignore. For the accounting industry, blockchain provides more than just a chance at increased efficiency and speed. The security it provides to accounting firms can greatly reduce the frequency of many common security issues, while saving money and reducing a lot of hassle once thought inevitable. If your business is interested in embracing the wonders of blockchain or if you have any questions, don’t hesitate to contact us.