The title of this article may have seemed a little unusual for an accounting-themed piece, but this topic is one pulled straight from the headlines and is having an impact on almost everyone. It only takes a week without a history of people getting sick – sometimes even requiring hospitalization – because of contaminated food. In addition to the obvious health and safety consequences of these unfortunately common incidents, there is an underlying impact in any disease outbreak or announcement of people who get sick. Regardless of the damage to the reputation, which can be difficult to correct, all the recalls of food products, the conversion of processes, the additional inspections and the reconstruction of the sanitation procedures cause a financial and operational slowdown of the services.
None of this is new, but accountants may be able to help deal with some of these serious problems. As? Leveraging the technology that is already attracting attention and investment from companies and accounting firms: blockchain.
At this point you have undoubtedly seen, heard or read at least some articles on the blockchain and the potential that holds for professionals and accounting firms. Real-time transmission of data in an encrypted format between member organizations is, at a high level, a potential paradigm shift in the way supply chains operate. Even with modern technological improvements, there are still many manual processes, paperwork and time delays when several members of the supply chain receive information. Food security and sanitation are basically a conversation on the supply chain with global scale, problems and implications.
While accountants learn how the blockchain could impact the profession and the wider business landscape, the levels of anxiety and enthusiasm associated with this technology continue to increase. Between the buzz surrounding the blockchain and its implications, many of the discussions focused on how the blockchain can improve traditional practices. What may have gone unnoticed, even if concerns about food safety continue to affect newspaper headlines, is how the blockchain can open up non-traditional opportunities to CPAs and accounting firms. The main question is how the blockchain can allow CPAs to enter new areas that link operational problems to financial results, as well as improve traditional offerings.
CPAs often talk about strategic partners to guide business decisions and food security is a real-world problem with real impact. This represents an opportunity that should be grasped.
Linking the blockchain to food security
Because accounting professionals are already investing significant amounts of time, energy and resources to learn how to use and implement blockchain options, it seems logical that this tool should be connected to addressing some of the most urgent problems facing companies today. Bridging this gap and linking the fundamentals of blockchain to accounting and food security may seem like an abstract idea, so let's look at exactly how it should happen:
1. The transmission of data in real time is a game change. Even with current technology, organizations are unable to pinpoint exactly where food contamination problems actually occur. This lack of transparency and accessibility is one of the reasons for implementing blockchain. Being able to identify exactly where the problems present themselves, whether they are financial or related to food safety issues, is something that should be communicated and exploited.
2. Greater transparency can increase the bottom line. Improving the transparency related to the safety and quality of food produced by an organization can, and already is, generate quantifiable impacts on financial performance. According to a study by the Food Marketing Institute, over 40% of survey participants said they wanted to know if the food was produced ethically and / or is organic or otherwise produced without preservatives. In addition to this desire, there is also a financial impact; a price study indicated that, on average, organic products have a 60% surcharge. Leveraging the blockchain to help organizations achieve these goals, including higher sales prices, will certainly help accountants to add more value and increase their value to the business.
3. This makes the CPA a real partner. Simply reporting the information that has already happened in the organization is not the way forward to generate growth, development and success. Blockchain technology, in addition to the excitement and buzz surrounding this tool, also provides CPAs with the opportunity to play a strategic role in the conversation. Improving the quality of products delivered to the market, helping to reduce the number of people infected with contaminated food and highlighting opportunities for managing to increase returns represents a true opportunity for accountants to have a real impact on an organization.
Food security – and preventing outbreaks that seem to happen with appalling regularity – is not something that technology, an idea or a process will be able to deal with. The same basic components of the blockchain, which are so interesting for the accounting profession, also offer operators the opportunity to expand, embrace new services and play a wider role in the decision-making process. For professionals seeking to achieve the coveted strategic partner label or trusted advisor, this is an opportunity not to be missed.