Blockchain will find answers. But you need to know the right questions.
By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant
If blockchain were human, here’s what it would say to you: “Dear accountant, your intelligence is far more powerful than my algorithmic intelligence. I can do the math, audit the authenticity of transactions incredibly faster than you can. But that’s not the point. The point is: I can provide you answers much faster than was ever possible. But only if you ask me great questions!”
MORE ON ENTREPRENEURIAL STRATEGY: The 7 Experiences Millennials Want from Your Firm | Is Blockchain an Extinction Event for Accountants? | Is Blockchain a Cloud Killer? | How to Beat Automation in Accounting | 3 Reasons Small Firms Stay Small | The New Needs of People at Accounting Firms
We are just about starting to see what Pablo Picasso saw way back in 1964 about “the enormous new mechanical brains” and “calculating machines.” They are “useless," he said. "They can only give you answers.”
If the mechanical brains “can only give you answers,” it is imperative that someone asks those brains the right questions. That someone had better be you.
The Entrepreneur’s Questions
Most likely, your business clients hired you as their accountant to seek answers to some “defined problems” – like filing a tax return. A quick, mini-survey hints that people equate accountants more than anything else with “tax return.” “Why” did they have a cash flow problem? “Why” did they make a loss this month … and so on.
Entrepreneurs had the questions. You provided the answers. Hourly billing might have made you feel you traded hours for dollars. But entrepreneurs were always paying for the answers.
If you make a list of the most common questions that your business clients ask you repeatedly, you’d notice about 10 to 15 common questions that get asked by almost every client.
Those common questions they ask you are not the keys to your future success. It is the questions they aren’t asking you.
Why? Because in the future you will be more strongly supported by automation, artificial intelligence, machine learning and blockchain. It will enable you to figure out the questions that your clients should ask you, but aren’t asking. Finding answers to such new questions will be easier, faster and profitable for accountants. The value of anything is perceived as good only if the cost of finding that value is lesser than the benefit it delivers. And that’s what the technological evolution will help accountants with – delivering new value and delivering traditional value. The new value delivered will be new benefit to clients and the price of that benefit depends on you, the accountant, if you coach your clients on what new questions they must ask.
The Questions Entrepreneurs (and Accountants) Don’t Ask
So, what are questions that entrepreneurs don’t ask often enough, until now?
When technology disrupts to create new possibilities, it also creates new challenges that need to be addressed. One can wait for things to happen and then react, or be one step ahead and train the clients to ask those new questions that will be mighty relevant to their businesses.
Blockchain is not just about immutable transactions that are recorded in a third ledger. It is about providing immutable record of a series of transactions that are needed to complete a particular business process. Take for example a purchase order for physical goods. When does the buyer pay the money to the seller? Visualize the human resources, technology, authorizations etc. required to move money only for the goods received (as per terms of the purchase order). A European bank recently announced that when a blockchain system triggers confirmation of receipt of goods, it would automatically move the payments as long as the money is in the account (provided certain conditions preferred by the business owner are met)!
If blockchain creates immutable record of each step in the process, imagine the time it can free up for key people (decision-makers) in an accounting practice/business, and the cost thereof. The question that emerges is “What will these key people do instead in that freed-up time?”
In proverbial terms, they’d spend more time sharpening the ax and finding the right jungle to cut.
In other words, entrepreneurs would need more inputs from accountants on the decisions they should make and the ones they shouldn’t make. According to the type of business, the stage in its lifecycle etc., the questions will be different. Remember, entrepreneurs too haven’t yet lived in the blockchain era so they won’t be able to easily fathom the new questions. And even if they are studying blockchain, they are rather doing it from their core business perspective, not from the accounting perspective.
Creative thinking will help accountants to be ready with those critical questions. Entrepreneurs find new ends with the same means everyone else has or can have. Basically, entrepreneurs find new problems to solve or find new ways to solve old problems more efficiently and profitably. With the blockchain future, the focus will shift from whether the transactions were accurately completed to the impact of those transactions on the business. Hence, most likely, those new questions will have something to do with entrepreneurial thinking, decision-making, identifying the preferred problems to solve, thinking of solutions to solve those problems and convincing clients to implement those solutions.
Could the future questions be something like:
- With the current sales trend of my company, when will I face a cash-flow problem / need overdraft?
- To grow by 10 percent more, which resources would I need and what will the cost be?
- Did a vendor change result in increased refund requests from clients?
- Sales haven't changed but profit has gone down. Why?
You want to ask questions that will make clients go “Aha! I didn’t think of that but I should have. Thanks a bunch.”
That’s the blockchain future of accountants. Questions will be the answers for future success of accountants. I will leave it to your imagination and anticipation what those new questions should be.
One More Question
“Is there any question that I should have asked but haven’t?”
Asking this question at the end of every conversation with a prospect or a client often generates key insights for accountants as the core fears, dreams, wishes and concerns come out with this question.