I’ve been in public accounting for over 25 years, and have seen many changes in how businesses use technology over the years. I’ve worked with business technology – from new electronic calculators to cell phones to sophisticated tax software and more. The electronic world is changing everything around us, and is changing how we do business.
My clients used to pay their business expenses with cash and checks. Today, it’s debit and credit cards, ACH and EDI. Most business transactions these days are handled as paperless and just about everything is done in an electronic format. And all of this information is going back and forth electronically “over the wire”. It’s not like regular mail; there are a lot of new security issues that go along with this way of exchanging information, and there aren’t too many people who really understand what it takes to keep things secured and still available.
All of this electronic information is having an impact on clients, too. I’ve assisted numerous business owners with compliance audits, and have met with many IRS agents, and they see the impacts directly. The IRS sees a lot of falsified information, like fabricated bank statements modified with Photoshop. These technologies have made it more difficult to prove the information, causing agents to have to look further and investigate all proof documents like copies of payments, original invoices, matched credit transactions, etc. And matching credit transactions isn’t always easy, since they are not always processed in the name of the vendor. There is still so much information, and electronic transactions are sometimes even harder to track.
While the job of the accountant may be a bit easier in that travel to client offices isn’t generally required to gather the information, getting all of the information is still not a simple task. It’s even more important now to make sure that all the electronic information and transaction data is collected, and to make sure the source information to support it is there. This is especially important to do on a regular basis, as some of the electronic information may not be readily available if you wait too long to collect it. If you close a bank account, you lose the data that was stored with it. Banks go out of business or merge, and sometimes records are not recoverable, so it’s important to capture the information and preserve it.
My practice deals with these issues every day, and it doesn’t appear that technology is working to make our jobs easier or faster to do. Rather, technology introduces new complications and challenges, and it is part of our task as advisors to our clients to help find ways to overcome those challenges and reduce complication.
I’d like to welcome discussions from other professionals – conversations about how accounting offices, law offices, insurance and real estate agents, 3rd party administrators and payroll processors… all professional service organizations and professionals – about how you are dealing with these rapidly-changing aspects of business. How are you handling business information, communicating with clients, implementing tools for data access and retrieval, and approaching audit protection issues?
Let’s educate ourselves, collaborate with our peers, and help our clients flourish in this cashless and paperless society.