Digitalisation of accounting - Lecture 7 Flashcards
What is digitalisation?
The use of digital opportunities to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business
What is the scope of digitalisation?
.Digital technologies have been with use for many years but the scale and scope is changing very quickly
.Older technologies - Desktop accounting software, ERP systems
.New technologies - Blockchain, AI, cloud
Why does digitalisation matter?
.Cost efficiencies
.Reduction of errors
.Enhanced customer retention
.Quick access to information
.Enhanced knowledge of clients
.Staff retention
Why should businesses incorporate digitalisation?
.Now is the time for change
.Large and small companies can benefit
.New ways of working due to Covid
.Creative business solutions
.World more open to innovation
What is the blockchain?
Series of immutable data records held on many computers across the globe and associated with a particular public or private blockchain network
What is a decentralised ledger?
.The ledger is decentralised and stored on ‘nodes’ of the network and updated continuously
.Ownership of assets on the blockchain is proven by using the blockchain to reconstruct history of all transactions for the asset
What are some of the advantages of the blockchain?
.No controlled access or charging fees
.No single point of failure - bugs or hacking
.Accessible 24/7
.Greater user control over data
What requires cloud computing and what are its key features?
.Most advanced AI and many digital applications require computational power and data access from cloud computing
.Key features - Accessibility, Performance and speed, reliability
How will AI improve accounting systems?
.Accounting hasn’t seen much innovation since double-entry bookkeeping
.AI offers capabilities to automate data entry, reconciliations and more
How does digitalisation affect credit assessment?
.Faster, more accurate assessments
.Firms without much transaction history can obtain credit score
.Combine structured data with unstructured
.Could lead to businesses being offered credit when previously it could be refused
What are smart contracts?
.Commercial relationships that use technology for verification and enforcement
.Property/asset registers (Patents)
What are some benefits of smart contracts?
.Elimination of need for third party
.Reduced transaction costs
.Reduced cost of dispute resolution
.Certainty of specific performance
What are some barriers to digitalization?
.Lack of talent
.Insufficient budget
.Cybersecurity issues
.Legacy systems
.Inability to experiment quickly
.Lack of corporate vision for digital
What is the three steps related to a successful roadmap for digitalisation?
- Lay the groundwork - What is realistic, be strategic in assessment and planning
- Collaborate with employees, clients - Enterprise-wide effort, include clients and customers in planning
- Finesse the plan - Clear guidelines, manageable steps
How would digitalisation redefine the finance function?
.Greatly enhanced decision making
.More than half of job roles in finance will be moderately or highly changed by technology
.Merge different roles into one
