Jun 08 The Internet of Things and its Role in Accounting
The internet is all around us. Literally. You’re reading this blog post on the internet, you likely made a call or had a meeting online today, your job duties might require access to the internet, and even your household appliances, like your refrigerator and washing machine, might be connected to the internet.
Those last two things—your refrigerator and washing machine, two appliances that functioned perfectly fine without the internet for decades—are part of a category known as the “internet of things.” The internet of things is the intricate network of smart devices, software, and power structures that not only use their internet connectivity to run more efficiently but to collect data about how they’re running and interacting.
And it’s changing how accountants work.
Accounting Relies on Data
Just like so much of our modern lifestyle relies on the internet, accounting relies on data. Data like revenue in, dollars spent, inventory counts, and taxes paid, just to name a few. The internet of things collects more data than we’ve ever had access to before, and this additional data gives accountants new dimensions to work with. Think of it like going from a pixelated, low-resolution image to a widescreen high definition one—it isn’t just more to see; it’s more detail about the images you already had in view and a smoother continuity between them.
Here are a few examples of data from the internet of things that accountants use:
- GPS coordinates from assets like company vehicles and other equipment can be used to confirm their locations and the number of miles driven
- RFID tags in inventory can aid in confirming thefts, losses, and exact inventory numbers
- Real-time sales data provides up-to-the-minute figures
When accountants are also advisors, they can use data collected by connected devices and programs to personalize their recommendations further. A generation ago, a business advisor might have been able to help their client mitigate risks like supply chain shortages by referring to general trends and historical data, but today, they can zero in on the exact conditions correlated with this kind of scenario and even help their clients forecast and plan for upcoming challenges like this.
The Internet of Things Enables Efficiency
Beyond providing more data than we’ve been able to access before, the internet of things enables accountants to streamline their work because it makes all the data they need easily available. No need to wait for data—it’s all available instantly in the cloud.
When all the information you need is at your fingertips, being updated in real time, you don’t need to spend hours and hours manually auditing your books. That means accountants can get accurate data in an instant, then focus their time and energy on tasks that the internet of things didn’t revolutionize.
Stay on the Cutting Edge
Unless you’re operating your business completely off-grid, it’s extremely likely that you interact with the internet of things in some capacity. As a multidisciplinary tax advisory firm, we can examine those interactions and develop a holistic tax and investment strategy that helps you meet your goals.
Interested in learning more? Contact Sax LLP today to schedule your consultation with a member of our firm.