Question

Given the continued rise of digital payment, be it via Zelle, Venmo, or crypto option, what is your personal opinion as to how this transaction and shift will have on the accounting and reporting process.
For example, if all payments are digital and instantaneous, will there be a need for account, account payable, or confirmations?

Answer 1

Digital payments began to rise with the growth of e commerce companies along with the development of digital wallet companies. The digital transaction sector is getting. Popularity and it is expected to get growth in exponential rate. The rapid development of the electronic transaction industry is influenced by various variables, including the comfort of the transaction, ever-growing mobile usage, rising non-bank billing agencies (transaction banks, electronic wallets, etc.), innovative legislative practices, and growing customer willingness for the electronic billing system. It is also identified with the development of smart phones and access to it by all sections of the society, the digital payment has grown tremendously.

The major advantage of digital payment is the instant reflection of all the aspects of transactions in the accounting system. The effects of transactions are posted in all the accounts instantaneously without any errors or duplication. It achieve leastbhuman intervention thereby reducing errors and omission in a large way. Since most of tge transactions are driven through system, all aspects of accounting and reporting can be automated which reduces lot of intermediate activities thereby making the ouput efficient and faster. It is also a convenient to make payment at anytime and from anywhere in the world which reduces the the time in receipt of money when a commercial transaction has taken place. It benefits by cost and time saving which considers huge volume of transactions in a short span of time. It incorporates transparency and security and also reduces accounts manipulations and frauds since the transactions are reflected instantly which cannot be modifies or removed from the system.

Though the digital payments has grown considerably and reduced the accounting functions or simplified in a huge way, the need for a check on the system and ensuring proper control is an important area which cannot be wiped off. The reporting requirements are still on higher side to cope with the increased complexity and dynamic changes in technology.