3 Ways IoT Is Impacting The Accounting Industry
Gartner has predicted that by 2020 there will be over 26 billion connected devices, including an estimated 7.3 billion smartphones, tablets and PCs - one for every person on the planet.
The Internet of Things (IoT) has taken the world by storm and has the potential to modernize every industry. Let’s explore how the technology has impacted accounting.
What is IoT?
IoT brings about another level of interconnectivity. AccountingWEB defines IoT as “a system of interconnected devices that communicate with each other and exchange data using the internet, without any human intervention or interaction”.
How is IoT impacting accounting?
The accounting industry is being heavily impacted by the increasing influence of IoT. In fact, the AICPA says that “IoT has the potential to revolutionize the way businesses gather data - and, in the process, transform many aspects of accounting and auditing”. Here are 3 ways:
- Managing the increased amount of data
IoT will change the sources of transactional data that flow into various accounting systems. This means that there will be a larger influx of data that will need to be incorporated into reporting systems. The majority of this data will also be supplied in real-time and will be displayed on dashboards that aid in decision making and planning. This will pave the way for more automation tools to help process and analyze the data.
- Becoming an advisor
Lately, the role of the accountant has shifted from providing manual services to expert advice on financial matters, like tax planning, financial management, and analysis. IoT will put accountants in a stronger position to provide advice by making client financials and financial activity increasingly visible. This data can help practitioners get a better understanding of a client and, as a result, offer better advice.
- Professional qualifications
The rise of IoT means most accountants will need to become more tech-savvy. An AICPA article references a statement from Doug Sleeter, CPA/CITP and founder of the Sleeter Group:
The IoT will bring accounting closer to IT and that professionals from both fields will need to work together to determine what kind of data to collect and how. CPAs will be expected to advise their clients on how to redesign their systems to accommodate for the IoT.
Source: Examples 1 and 2 (listed above) were inspired by an article in accountants daily.
Nick Chandi, CEO of PayPie, says the industry is likely 5 to 10 years away from true mainstream adoption [of IoT]. That said, the savviest accountants would do well to become better data specialists now and begin to learn the IoT language”.
To continue learning about the importance of data, data analytics, and connectivity read our recent blog.