The hype over blockchain is reaching a fever pitch. According to Juniper Research, two-thirds of the world’s large corporations expect blockchain technology to be integrated into their systems by the end of 2018.
Blockchain certainly introduces new financial opportunities. But opinions about the size and scope of those opportunities vary. Software development firm Ignite wrote that blockchain “is getting ready to change the world,” pointing to plans from the Depository Trust & Clearing Corporation (DTCC) to funnel its $11 trillion in annual transactions through the blockchain, among other impressive statistics.
On the other side, Apple Inc. co-founder Steve Wozniak recently called blockchain “decentralized and totally untrustworthy,” comparing current enthusiasm over the technology to the excitement that preceded the implosion of the dot-com bubble.
But no matter what the future of blockchain may hold, your clients are going to be asking about it—if they haven’t already. In response, the Big 4 are all embracing blockchain in one way or another. EY and PwC both now accept Bitcoin as a payment method. Deloitte launched Rubix back in 2014, advertised as a “one-stop blockchain software platform.” And KPMG unveiled its Digital Ledger Services program in 2016.
Aprio, a top 100 firm headquartered in Atlanta, started building its blockchain practice five years ago and has been accepting Bitcoin as payment since then.
The accounting industry’s response to client interest in blockchain has opened up a new career path for accountants: blockchain consulting. In this article, we’ll explore how blockchain works, what a blockchain consultant actually does, and ultimately help you determine if blockchain consulting is the right career choice for you.
OK, back up. What is blockchain exactly?
If you’re asking this question, don’t feel ignorant or alone. Blockchain is an immensely complex technology, and even IT experts struggle to comprehend the breadth of the platform and its potential capabilities.
In its article “The Truth About Blockchain,” Harvard Business Review defines blockchain as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”
The website Blockgeeks offers additional context:
Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
We chatted with Mitchell Kopelman, CPA, partner-in-charge of technology and blockchain at Aprio, to get further clarification.
“I like to refer to blockchain as the ability to have handshakes online,” Kopelman said. “It’s the ability for people to exchange info online and validate that.”
If you’re still confused, the “Cryptocurrency” episode of the Netflix original series Explained offers a good overview of blockchain and helpful visualizations that demonstrate how it works.
How is blockchain used?
The first blockchain database was created in 2009 by a person or group of people known only by the pseudonym Satoshi Nakamoto. It was developed alongside Bitcoin to serve as the underpinning technology that would track transactions and help legitimize the new cryptocurrency. While Bitcoin and blockchain’s origins are intermingled, uses for blockchain are starting to expand to new areas.
“Blockchain could be used by restaurants to offer proof that items are truly farm-to-table,” Kopelman said. “A restaurant customer might open up a farm-to-table app and actually see where all the ingredients came from because each vendor is required to be in the blockchain.”
Kopelman went on to highlight other potential uses for blockchain. Manufacturers, distributors, and retailers could gain better control over their supply chains, more accurately tracking products from factory to inventory to global store locations. Publishers and social media outlets could map the path of a report or rumor, helping them distinguish between real and fake news. Car shoppers could access a verifiable account of past owners, accidents, and repairs.
“Blockchain has the potential to impact every industry. You have it in marketing, the media, real estate, email—you name it and there are companies doing it,” Kopelman said.
What does a blockchain consultant do?
Blockchain is impacting the processes of both accounting firms and their clients in significant ways.
In some cases it changes recordkeeping practices, including the way transactions are initiated, processed, authorized, recorded, and reported. And regulatory and tax requirements may be different for companies using blockchain in place of traditional ledgers.
Blockchain also presents a significant opportunity for accounting firms—because transactions are more verifiable, firms can improve transparency and deliver better data, analytics, and insights to their clients.
Along with these changes come questions from your clients: “Should I be using blockchain? What are the benefits and tradeoffs? How will it affect my accounting processes and my relationship with your firm? What security and privacy issues does blockchain introduce?”
This is where blockchain consulting comes in. As a blockchain consultant, you’ll be responsible for investigating the answers to those questions and communicating them to the client. You’ll be the client’s guide into blockchain accounting, offering a helping hand and best practice advice at every step along the way.
“The accounting and tax issues of blockchain are fairly complex,” Kopelman said. “Some companies are using blockchain to improve their internal business processes, so you’ll need to help them do that. Others use it to interact with their customers externally, which poses another set of challenges.”
Blockchain also opens possibilities for new types of currencies and transactions that blockchain consultants must help their clients implement and manage.
“Companies may create cryptocurrency tokens and run them through the blockchain. It might be receiving tokens for payment or giving tokens as rewards. There are unique accounting and tax thoughts around how those items should be accounted for,” Kopelman said.
Aprio: A leader in blockchain consulting
With one of the oldest and most sophisticated blockchain consulting practices in the industry, Aprio is a prominent leader and innovator in the space—and one of the first places you should look for work if you’re interested in becoming a blockchain consultant.
“We started working in this area five years ago with one client in particular, and our practice has grown quite large in the last couple of years and in particular over the last year,” Kopelman said. “We’ve probably turned away as much business as we’ve taken on. And there’s a lot of interest internally. Employees come up to me every day saying, ‘Can I work on some of the blockchain clients?’”
While Aprio is a midsize firm, it has a global reach. Its international capabilities and personal touch make it an ideal partner for companies seeking blockchain advice.
“We have both the technology and language skills to help businesses deal with the international tax and accounting issues of running subsidiaries around the world through blockchain,” Kopelman said. “Our employees collectively speak over 25 languages, so we’ve got everything we need to operate and compete on a global level.”
CPA.com recently recognized a member of Aprio’s blockchain team for her expertise and leadership. Jagruti Solanki, CPA, CGMA, senior manager for Aprio, was named co-winner of the 2018 Innovative Practitioner Award. CPA.com chose Solanki for the honor because she “has been instrumental in developing best practices for accounting and financial reporting related to the digital distributed ledger technology.”
If you’re interested in blockchain consulting but afraid you don’t have the technical know-how to make the move, Kopelman said you don’t need to worry about that at Aprio.
“While we do look for people with some degree of technical ability, we’re eager and willing to train new employees in all areas of blockchain consulting. If you want to join us, just reach out. We are growing and looking for people,” Kopelman said.
If you want to become a blockchain consultant at Aprio, a full-service accounting firm operating out of Atlanta, Ga., contact Mitchell Kopelman to get the ball rolling. Or if you just think Aprio sounds like a great place to work and want to get your foot in the door now, click on the links below to apply for an open position.
Atlanta, Georgia accounting job openings