Blockchain is a transformative technology inside and outside of the business world. Learn how it can impact CFOs and entire businesses.
Blockchain is an especially useful emerging technology for the financial decision-makers inside businesses, providing an effective and powerful combination of transaction receipts and informational security. Let’s look at what blockchain is as well as how it will impact chief financial officers and companies as a whole.
What is blockchain?
Blockchain can be described in the most basic sense as a linked set of records that is especially difficult to alter after they are created. This digital system of recordkeeping draws on a variety of security features, from cryptographic hashes that link individual records to the need for a majority of stakeholders to approve any retroactive changes, to maintain data integrity.
This exciting technology has a variety of uses, from tracking distribution and use of digital currencies to maintaining digital records in a wide variety of business contexts. Data storage and informational security can only improve when a secure blockchain is developed and properly implemented for business use. That leaves CFOs to wonder how they can effectively incorporate blockchain into their organization’s operations, and how such changes will impact them.
How will blockchain influence CFOs?
CIO contributor Peter B. Nichol said improved financial auditing is one of the key benefits of blockchain that is relevant to CFOs in particular. Due to the secure, resilient and persistent nature of this digital recordkeeping format, a variety of traditional practices for auditing will no longer be useful as compared to a blockchain approach. The advantage in this case is clear. Without physical records that can be damaged due to natural disaster or digital logs that are more easily manipulated, the accuracy of the information used by auditors improves. That advantage carries over into their final product, leading to better reporting and resultant insight and action for CFOs and the business as a whole.
Deloitte pointed out a group of major advantages that comes along with effective use of blockchains: lowered costs, automated processes and near real-time reporting. This leads to a number of positive changes for CFOs and the processes over which they have control. From reduced spending on recordkeeping and related security measures – while improving the safety of those records at the same time – to efficient contract validation and internal financial oversight, blockchain has a lot to contribute to the modern CFO’s abilities.
While gaining popularity and used increasingly in a variety of business applications, it’s important to point out that blockchain’s takeover is not immediate. CFOs should not feel immediate pressure to pull the trigger on a major blockchain project, especially if the need to do more research is felt. Instead, company leaders should actively research and develop familiarity with blockchain technology, then develop a strategy for its use before making any major decisions.
In a business world where financial management regularly undergoes periods of great development and change, a reliable accounting outsourcing partner is vital. Talk to Consero today to learn how our technology-focused outsourced accounting services can benefit your operations.