IoT and Accounting: On the Verge of Another Revolution

To the internet!

IoT, an abbreviation for Internet of Things, is an umbrella term for devices that are capable of connecting to the internet and sharing information with each other with minimal human intervention or no intervention at all. Contrary to the false concept people associate to when hearing the term, an IoT device doesn’t necessarily mean a smartphone or a tablet; instead it is any device that is able to send, share and receive data via the internet.

To better understand the whole concept, imagine IoT as a giant Skype-chat for gadgets: the device can display relevant information in order to receive the necessary commands from the operator – like communicating with a chatbot, only with the roles reversed. However, IoT devices are also able to communicate with other internet-compatible devices and perform tasks on their own based on the information they share with each other. And to put the cherry on the cake, all of this communication happens in real-time, meaning a continuous flow of data that can be analyzed and used for everything – even accounting.

Exploiting IoT in accounting

The integration of IoT technology into accounting has many positive aspects. One such advantage is that the aforementioned continuous data flow further improves budgeting accuracy, cost planning or forecasting. The only thing raising concerns is that all this data will originate from countless sources, not to mention they have to be duly selected and interpreted so only the relevant information could get to business owners.

This is where IoT tech-savvy accountants enter the picture: by gaining access to real-time transactional data and existing operations, they can immediately respond to issues or evaluate risks in a more comprehensible manner. The role of auditors will also change for the better: as an unexpected consequence of letting IoT into the world of accounting the enormous data flow requires enhanced monitoring, meaning that auditing will finally become uninterrupted. In other words, not only will the whole process become more secure than ever, but easier as well, thus presenting another opportunity to auditors by turning them into data specialists instead, potentially making them an extinct species as was forecasted not long ago.

IoT and online accounting software: the perfect pair

Online solutions already automate many mundane tasks related to accounting: from recurring invoices and receipts interpreted by computers to simplified bank reconciliations, automatically generated business reports and so on. Nowadays anything can be done easily with a few clicks. Not to mention that these programs are more than capable of machine learning, further reducing the need for human intervention.

Now imagine if the IoT technology that is intended to connect more devices to the internet combines its powers with online accounting software. In fact, the integration of IoT devices into accounting software can be so fluent that soon it won’t be surprising if your program will be capable of automatically accepting purchase orders created by IoT devices by responding with, for example, an automatically generated invoice. And all accountants, auditors or co-workers have to do is to grant the necessary permissions to these ‘regular’ transactions. But if we really want to let our imagination run wild, and involve the blockchain technology as well, we won’t be surprised if this cooperation between accounting software and IoT devices soon reaches sci-fi territory – further elimination of human intervention.