The Internet of Things (IoT) is here – and it has the potential to shake up the way accountants and bookkeepers work.
What is the IoT, anyway?
The easiest way to think about it is to look around your house and note all the objects you’ve gathered – from the TV, to the couch, fridge, lamp and heater.
Now, imagine that all these objects had sensors in them tracking different things.
For example, a sensor could be in your heater could record when the ambient temperature got to a certain level.
Or sensors in the fridge could note how much milk is in your fridge.
Now, imagine that when the temperature dropped too low, your heater automatically turned on. And when you ran out of milk, your fridge automatically ordered more milk.
Starting to get an idea?
Now expand that to include everything in a city, talking to each other.
Imagine traffic lights and cameras could ‘talk’ to a driverless car, advising the car of delays so the car’s onboard navigation system could plot a new course – all while ‘talking’ to hundreds of other cars around it.
The IoT is about objects being able to record and transmit data independently of human input, and it’s opening up a whole new raft of opportunities.
For example, sensors in machinery can accurately record wear and tear so that the machinery can predict when it’s going to break, as well as the amount of downtime needed.
The machines are now talking to each other and generating zettabytes of data which did not previously exist.
So how does this affect accounting and bookkeeping?
For about 100 years, firms have focused on process to drive efficiency and maximise returns.
The latest MYOB Radar Report release explores this in depth, with firms now having a whole new dataset to work from.
Soon, with sensors attached to every aspect of a firm’s workflow, a new age of efficiency will be upon us.
As an example, the efficiency gains from IoT-enabled calendars could have a huge impact on time management:
In the analogue world, this would play out very differently and lead to wasted time (and therefore money).
IoT promises to bring better business planning and resource allocation, and will also help to optimise operational processes, minimise expenditures, and mitigate issues more quickly.
It will also create an amount of data that goes beyond anything generated before.
Not only will transaction data flow in real time, but information gathered from non-sales-related IoT devices and sensors will enable the advisor to move from reactive advice based on historical data, to proactive and even prescriptive advice.
The advisor will be able to use live data analysis to predict future outcomes and make smart business recommendations.
The client will have peace of mind knowing that any financial discrepancies and opportunities are monitored and acted upon by their trusted advisor.
This is the Connected Practice in action.