Articles

Back to the Future: Automated Financial Accounting Reconciliation through IoT

IoT ThumbThe emerging Internet of Things (IoT) is connecting a new wave of devices — from industrial sensors and wearable devices to retail cameras — to the Internet. The data from these devices can reduce costs, increase revenue, and improve customer service, but only if that data can be analyzed and acted on quickly.

Introduction

The industrial Internet is going to transform the industry by making industrial machines more intelligent and enabling services using real-time data coming from sensors and machines. The intelligent devices will be able to take actions (to optimize processes, improve efficiencies, reduce costs, etc.) based on insights generated from real-time data and analytics. This requires connectivity and interoperability across machines, fleets, plants, and cloud-based systems. Industrial communication standards will play an important role in providing seamless connectivity and integration between heterogeneous systems so that IoT-created data can be stored, processed, analyzed, and acted upon close to, or at the edge of, the network rather than in centralized EDWs.

Accounting devices

Let us think of installing devices/sensors on all plant & machinery and associated equipments and make ERP applications sense those signals and convert & integrate them with respective Corporate Financials systems. Some examples of such devices are:

  • Each inventory item to be attached with RFID tags / sensors and ERP application can get the list of items delivered and invoiced & financials recognized accordingly.
  • Sensors attached to employee badge cards or smart phones can be used to calculate check-in and check-out times and compute payroll and update financials appropriately.
  • Devices/sensors attached to machinery & equipments can monitor usage, idle time of machines and can calculate depreciations and update financials accordingly.
  • Sensors attached to Electricity/gas/water meters can calculate periodic consumption and compute and update financial accruals automatically in financial systems.
  • Monthly opening & closing balances of inventory calculated automatically through sensors and updated in ERP systems.

If we can apply IoT concept/devices at each stage of the complete life cycle and integrate with ERP and financial applications, this automated financial reconciliation would become reality soon.

Road Ahead

Automatically taking actions based on data insights is becoming an increasingly important aspect of modern applications. The Internet of Things is a fundamental step towards enabling intelligent & integrated decision making based on the data insights generated by software devices and applications.


Authored by:
Raghuveeran Sowmyanarayanan

Raghuveeran Sowmyanarayanan is a Vice President at Accenture where he works with clients to help identify and shape the “right” solutions for their various Business Intelligence (BI) and Information Management (IM) needs. Mr. Sowmyanarayanan also actively networks with industry leading BI & IM practitioners. He launched TDWI’s India Chapter in 2006 and served as its VP for 2 years. He has also organized and led multiple TDWI events in cities throughout India. Raghu began his career developing indigenous ERP products. Later, he got attracted to the concepts of Business Intelligence & Data warehousing and focused in those areas. Prior to Accenture, Raghu served as the BI/DW Lead for Energy & Utilities at Wipro Technologies and the BI/DW Lead for Genpact. Raghu is a well known author and speaker having published several articles in international journals like TDWI, DM Review, IT Toolbox & bicorner.com and spoken at multiple Information Management and Big Data conferences.

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