Perhaps you’ve read the job postings for staff accountants experienced in reconciling cryptocurrency accounts. Or maybe you’ve heard about this type of accounting ledger that can be shared, updated and verified without the threat of corruption. Or you’re seeing webinars on the innovative and disruptive applications of blockchain technology.
Do these reflect a passing phase, or are they game changers for the accounting industry?
Blockchain stores transaction data in blocks that are linked together to form a chain. As the number of blocks increases, so does the chain. Bitcoin is a digital currency, or cryptocurrency. Its transactions are recorded and stored on blockchain, where its value can be transferred from person to person. As cryptocurrency gains in popularity, some businesses are accepting it as a form of payment.
Finance leaders in a Robert Half Finance & Accounting survey said blockchain technology and cryptocurrency will increase the need for specialized accounting in the years ahead and also push financial professionals to expand their skill sets. Half the respondents said cryptocurrency will become at least somewhat common for business transactions in the next five years.
View an infographic about how blockchain and cryptocurrency will affect accounting and finance departments.
How do you explain blockchain technology and its impact?
Edward Lee: “Very simply, it’s a public ledger that is decentralized and encrypted. The benefit here is that you can only add information and can’t edit previously stored information, essentially making it tamper proof.
“The other element of blockchain is that it is public, driven by consensus. This increases its visibility and puts the information through many checks for validity. It’s important to note that blockchain is not a single technology, but rather an architecture. All in all, it is a form of decentralizing data.
“As for impact, it may be one of the most significant evolutions we’ve seen since the emergence of the internet, which gave us unprecedented access to information and the ability to share that information. Before blockchain, it was very difficult to verify a digital transaction. Identifying the source and making sure it was authentic was a huge stumbling block for digital transactions. Blockchain takes everything a step further as a way to share and access value.”
How can companies benefit from early adoption?
Lee: “I think the immediate benefactors of using blockchain would be in the public sector, technology, transportation/logistics and financial services industries where the creation of smart contracts would offer transparent and quick access. The smart contract is an agreement that would activate upon contingencies being met. What makes it smart is that the conditions of the agreement are evaluated by the blockchain, making it a trustless transaction, meaning you don’t have to rely on a third party to evaluate and execute it. This has tremendous implications for the speed at which we do business.”
What can employees and employers do to stay ahead?
Steve Saah: “Finance professionals interested in entering the blockchain space should consider looking for programs that offer blockchain certifications. Industry associations have continuing professional education (CPE) self-study courses in blockchain fundamentals, such as the Blockchain Fundamentals for Accounting and Finance Professionals Certificate offered by the American Institute of CPAs (AICPA). Employees can also learn about the opportunities in accounting technology by taking college courses or volunteering for projects at their companies.
"Companies waiting to see how they'll be affected by blockchain and cryptocurrency will find they're too late. Organizations must act now to stay ahead of the resulting challenges and opportunities.”
Robert Half Finance & Accounting offers the following ways companies can build their accounting and finance teams' blockchain expertise:
- Facilitate collaboration — Encourage communication with the IT department for seamless integration of the new technology. IT colleagues may also be able to share best practices and training.
- Relax the job requirements — Blockchain expertise is hard to find but can be developed. When hiring for roles requiring this knowledge, consider focusing on candidates who will have a short learning curve and can be trained on it.
- Accelerate the hiring process — If you find a candidate you want to hire, move fast. Also, enlist the help of a specialized recruiting firm that has access to candidates you may not be able to find on your own and can assist with your hiring efforts.
How important is this for accounting and finance?
Saah: “Blockchain is still relatively new, so we don’t have all the answers yet. But it clearly has the potential to have a big impact on the accounting profession, and beyond.”