Crunching numbers

Accounting as a job. That’s what I have been thinking for the most of my time at school. I have been wondering if I want to be an accountant after I am done with my school. Now, after 1,5 years in school, I got a job as an accountant and so far I like it very much. I am learning so much more in the job and doing the actual “number-crunching” than learning on a school bench.

 

Accounting as a job, doesn’t really require a certain degree, but of course it helps you on the job. You can pretty much enter the field with education at every degree level (allbusinessschools.com).

 

Accountant as a job description means that you crunch numbers and for example prepare companies’ balance sheets and income statements. You also often have to deal with their taxation which makes the job quite interesting and challenging at some points. I have not done any specific duties on taxation for any company, but I have been dealing with the value-added tax, but it has been some what easy so far.

 

Source: https://www.allbusinessschools.com/accounting/job-description/

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AI in accounting and how it will change accountant’s career?

A lot has changed from how the accounting used to be. Few decades ago pencil, calculator and paper folders were bookkeepers’ and accountants’ best friends. Back then one mistake made on pencil could mean hours of work to find and fix the mistake. After computers become common also accounting programs came around to help accountants. Most well known was QuickBooks, which was used by over 80% of bookkeepers in United States of America. Even if these programs saved a lot of bookkeepers time, still a significant amount of their time bookkeepers spend cleaning up errors made by their clients.

 

After computer programs, web based cloud services came around to save even more time and money. Because of cloud services most companies could save from 30% up to 70% on their IT expenses.

 

The image of introverted math nerd with classes sitting in office writing down numbers is something that comes to most peoples mind when thinking work of bookkeepers. Nowadays it’s very important for accountants and bookkeepers to be social, as they have become more and more of business consultants. As these automated services do all the counting accountants need to be able to interpret numbers even more. Clients expect accountants to tell them how they could improve their business result with numbers

 

 

Even though technology evolves fast and some people believe that machines and artificial intelligence will take over most of the jobs, it’s very unlikely that AI will take over jobs of accountants and bookkeepers. ‘’Rather than eliminate the human workforce in accounting firms, the humans will have new colleagues—machines—who will pair with them to provide more efficient and effective services to clients’’(Bernard Marr). As contributor for Forbes Bernard Marr wrote accountants need to learn to work even better in harmony with machines to offer best possible final result for clients. Three most important skills for accountants when AI is coming even more advanced are fundamental data skills, ability to automate and tell stories. Ability to tell stories means that accountant is able to transfer data in such form that makes sense to clients.

 

 

As artificial intelligence is great for automating bookkeeping, it also can help companies to avoid white-collar crimes. AI is able to notice frauds easier than humans. For example mislabelled expenses, illicit upgrades and subtle transfer of wealth are easy for AI to detect. Of course there are weakness in AI such as security risk of hackers, still it has more pros than cons.

 

All in all evolution of technology is going to change a lot in accountants’ future careers. If you want to be accountant or bookkeeper in future, you have to be ready to learn new things all the time. I think that it’s great that AI does all the hard work. It leaves more time for accountants to do creative work. It’s clear that it’s also going to change accountant studies to more social way.

 

Lähteet:

 

Machine Learning, Artificial Intelligence – And The Future Of Accounting. Bernard Marr. July 7, 2017

 

https://www.forbes.com/sites/bernardmarr/2017/07/07/machine-learning-artificial-intelligence-and-the-future-of-accounting/#1d76958d2dd1

 

 

 

Skills that help accounting professionals succeed alongside AI. Ken Tysiac. January 29, 2018

 

https://www.journalofaccountancy.com/news/2018/jan/accounting-skills-to-succeed-alongside-artificial-intelligence-201818267.html

 

 

Voices 5 common types of back office occupational fraud, and how AI can stop them, Anant Kale. February 15, 2018

 

https://www.accountingtoday.com/opinion/5-common-types-of-back-office-occupational-fraud-and-how-ai-can-stop-them

 

 

Why Artificial Intelligence Is The Future Of Accounting: Study, Jean Baptiste Su. January 22, 2018

 

https://www.forbes.com/sites/jeanbaptiste/2018/01/22/why-artificial-intelligence-is-the-future-of-accounting-study/#5d1b2292337b

 

 

How accounting has beencahnged over time with technology:

http://www.accounting-degree.org/technology/

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Simple steps to adjust your personal finance- for life!

Everybody can save money and all of us really should. Of course, there is a difference, whether you are working and earning 7000 euros monthly or you are barely managing your life with study grant. I´m here to tell you that you can do it by showing you some simple steps to take. The trick is that once you start saving, even if it´s only 5 euros a month, you will slowly but surely start to reassess your spending and possibly realize that you have some expenditures you could easily cut.

 

One of the key questions you should ask yourself related to spending is: Do I really need to buy this, or do I just want to buy it. Of course, we are not machines and in life you must enjoy as well, but to be on the safer side with your finances it is advisable to budget and also budget your enjoyments. (Huffstetler, 2018.) If you are new to saving, then have patience and understand that you will learn from your budgeting mistakes and you will be able to prepare more efficiently for changes in your expenses or financial situation.

 

The steps to take

 

  1. Income – Outcome

Write down all your income and outcome including monthly subscriptions like Netflix. If you have frequent bills to pay such as quarterly insurance bills prepare for these as well.

 

  1. Budget

First budget for your needs, including housing, groceries and all your bills. After seeing how much money you have left after paying your bills etc. create a savings budget and a budget for your own personal enjoyment e.g. new clothes or eating out.  You can even have several savings accounts where you can differentiate your goals for each savings for example emergency fund, holiday savings or savings to buy your own house. Learn how to save money first, take it very seriously and after you have mastered the art of saving look for ways to make your savings grow by investing. You must track your spending to be sure your budget is in place and modify if needed. You could first aim for saving 10% of your income and slowly increase it once you are getting more comfortable with your budgeting. (Sadler, 2018.)

 

  1. Debt

Avoid taking debt as much as you can. Pay off your high interest debts first and remember afterwards you have finished paying off a certain debt to still continue to pay that same amount towards your other debts or forward it to your savings account. (Sadler, 2018.)

 

There are plenty of applications you can download to your smartphone to help you with your finances. You can use apps to track staying on your budget or planning your savings or paying off your debt.

Pivo is a mobile payment app for customers of all banks but it also offers budgeting and other tools for OP customers. Pivo can estimate your account balances based on your previous spending habits and cashflows. It is also a highly visual tool and automatically categories your account transactions to different groups such as hobbies or entertainment. (Nordkapp 2018.)

 

 

Sources:

Erin Huffstetler 23.1.2018. The balance.  Distinguishing between wants and needs.  Https://www.thebalance.com/wants-vs-needs-1388544. Read 21.3.2018.

Alex Thomas Sadler 2018. Clark. Saving 101- why you should save and how to get started. Https://clark.com/commoncents/saving-101-why-you-should-save-and-how-to-get-started/. 22.3.2018.

Nordkapp 2018.Pivo The Finnish Mobile Wallet.Https://nordkapp.fi/cases/pivo/english.html. Read 22.3.2018

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How technology is changing the accounting profession?

It is a current topic how technology changes professions and replaces employees. The development of technology also changes the accounting professions from the paper work to the more electrical and automated work. (New England College 2017) Some professional roles are becoming more automated which decreases employment situation in some sectors. Some roles on the other hand are heading towards a situation were assignments require more different kinds of skills and work experience from the employees. (Jaakkola & Marttunen 2018)

According to the Chief Executive Officer of Balanco Oy, accounting companies’ employees and their duties are becoming more consultative and employees must be experts in what they do. In corporations there will also be more employees with the different educational backgrounds, such as Masters of Law. (Marttunen 2018)

According to Accountor Finago Oy’s application consultant, one of the most important skills an accountant must have today is knowledge how to use company’s electrical software. Another important fact in the accounting companies’ is good customer service because today it is quite easy for customers to change their systems into other software offered by other companies. (Jaakkola 2018)

Earlier accountants worked with papers, pens and calculators and their main responsibility was to verify that ledgers were made correctly and that ledgers were accurate. Today accountants are more likely part of the strategy planning team: they give advice, develop new methods and process and prepare forecasts for the future. These are good examples about assignments that automation can’t do and can’t replace. (Top Accounting Degrees 2012) In other words these are the jobs where companies’ need employees in the future and the things that students should study more at school. From the accountant’s perspective, it is going to be year after year more important to know how to analyze company’s performance and make forecasts.

Companies expect good IT skills from the employees because software is used for almost everything. It is common that companies buy software that work best for their process either as a cloud service or as an on-site application. Software guarantees trustful and right timed data transfer between the employees and the leaders. (Top Accounting Degrees 2012; New England College 2017)

Corporation’s data systems can split into two groups: to on-site applications and to integrated ERP-systems. Companies have to choose if they want to buy the best software into each different process or if they are going to use already integrated enterprise resource planning systems.  The company’s business sector, size and system needs influence the company’s choice because it is important to think for example how multifaceted system the company needs and which one is the most suitable for the business.  (Lahti & Salminen 2014, 36)

 

 

 

Sources

Jaakkola, Pauliina 2018. Presentation about electric financial administration.  Application Consultant, Accountor Finago Oy.

Lahti, Sanna & Salminen, Tero 2014. Digitaalinen taloushallinto. 1. painos. SanomaPro. Https://verkkokirjahylly-almatalent-fi.ezproxy.metropolia.fi/teos/HADBFXJTFF#kohta:34. Accessed 21.3.2018.

Marttunen, Mikko 2018. Presentation about electric financial administration. Chief Executive Officer, Balanco Oy.

New England College 2017. How Technology is Changing the Accounting Profession? https://www.newenglandcollegeonline.com/resources/accounting/how-technology-is-changing-the-accounting-profession/. Accessed 21.3.2018.

Top Accounting Degrees 2018. How has Technology Changed the Accounting Industry? https://www.topaccountingdegrees.org/faq/how-has-technology-changed-the-accounting-industry/. Accessed 21.3.2018.

Picture: http://www.financialgazette.co.zw/wp-content/uploads/digitalisation.jpg

 

 

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What’s up in cryptocurrencies?

As we all know, cryptocurrencies may be a huge gamble. We still remember when Bitcoin peaked at 19,500$ last December, Ethereum peaked 1400$ in the beginning of January (Arstechnica 2018).But how is it now? Today, 25th of March Coincap shows that Bitcoin’s value is about 8,500$ and Etherium is about 520$. That means a 56% drop for Bitcoin and a 63% drop for Ethereum in just a couple of months. But let’s go back a couple of months more. Last November those two values were the same as they’re now so that meant 50% to 60% rise in market during December and January.

As we can see there have been big changes in just a few months and since the cryptomarkets are still unregulated. (Forbes 2018), its highly recommended to keep in mind that you may lose all your investments in just a few months.

Cryptocurrency is known for its untraceability (Acca 2018) and illegal activities can clearly benefit from it today but how about in the future? With some regulations cryptocurrencies may be a huge factor in financial transactions of the future. For example a futurist Thomas Frey said in Time magazine that ”cryptocurrency is very much here to stay” and cryptocurrencies are going to displace roughly 25% of national currencies by 2030. They’re just much more efficient, the way they run.” That’s something we are eager to see

 

 

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Is Sustainable Banking Unrealistic?

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Pauliina Stewart
Finance Student @ Metropolia University of Applied Science
Blog post // 22.3.2018

If you want to make choices that are sustainable, green and ethically right – you are living in a fantasy world, at least this was what I was told when speaking of banks. And honestly before my trip to Belgium a couple of weeks ago, this was also my opinion.

I took part in Business Week in Leuven and we had great guest  lecturers from Triodos Bank. Triodos is based in Netherlands, with branches in Belgium, Germany, UK and Spain (Triodos Bank 2018). They offer totally sustainable banking services. This was honey to my ears and it get’s even better: Triodos made  a net profit worth of 37.4 million euros last year.

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Picture 2: Sustainable Banking (World Finance).

Triodos is an example that banking can be both, ethical and profitable. But why do sustainable bank exist in the first place? One explanation is that after the financial crisis more and more banks grew towards sustainability – not only to attract customers, but also to change the culture of banking itself (World Finance).

Unfortunately, in Finland we do not have entirely sustainable banks, but they  make choices that are sustainable. For example, many banks have sustainable investment  opportunities and customers can buy sustainable funds. By the way, a Nordic bank, Nordea, announced on the 22nd of May that they are not going to buy anymore Facebook stocks, because of Facebook’s actions of selling data and of failing to protect personal information (Nordea 2018).

As a summary, there  are sustainable banks, which actually are profitable. With sustainable investing you do not only make profit but also make the world a better place. You do not gain profit probably as fast as you  might do by investing in non-sustainable markets or stocks, but eventually you will. Because sustainable banking is transparent – you are able to make better choices.

Look this video here: Https://www.youtube.com/watch?v=Qo6rjuULgtI

 

Sources:
Nordea 2018. Nordea jäädyttää Facebook-sijoitukset Tähtirahastoissaan. News and Press Releases 22.3.2018. Nordea. https://www.nordea.com/fi/media/uutiset-ja-lehdistotiedotteet/News-fi/2018/2018-03-22-nordea-jaadyttaa-facebook-sijoitukset-.html. Read 22.3.2018.
The Mekong Eye 2016. What’s the Deal with “Sustainable Banking?” Mekong Eye. https://www.mekongeye.com/2016/09/20/whats-the-deal-with-sustainable-banking. Read 20.3.2018.
Triodos Bank 2018. Who we are. World’s leading sustainable bank. https://www.triodos.com/en/about-triodos-bank/who-we-are. Read 18.3.2018.
World Finance 2018. Sustainable Banks. Beyond survival. https://www.worldfinance.com/banking-guide-2016/sustainable-banks. Read 20.3.2018.
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Investing in cryptocurrency

What is cryptocurrency?

Simply put, cryptocurrency is a digital medium of exchange that can be used for purchasing, exchanging, selling products and services and investment. It has no physical form, only existing in virtual space. One advantage of cryptocurrency is it’s encryption, which prevents fake identical transactions, equating to fraud. (Rossow, 2018.) Cryptocurrency transactions are also anonymous, protecting the identity of the traders but also making it harder to regulate and watch over. As a result of the lack of liquidity in the market, cryptocurrencies are very vulnerable to speculation and their prices can fluctuate wildly. (Solon, 2017.)

Advantages and disadvantages

A big advantage of cryptocurrency transactions is their security. It’s system is permanent and unalterable, making it unhackable. Another thing cryptocurrencies have going for them is their independence. Since they’re not directly regulated by governments or banks, they’re completely independent of other systems that are subject to more regulation. (Johansson, 2018.) Theoretically this makes cryptocurrencies an even more valuable asset to own, since its price won’t be affected in the same way as other investments.

Cryptocurrencies come with their fair share of disadvantages as well. Because of their volatility, they don’t suit low-risk investors. Cryptocurrencies are also very uncertain because of their novelty, when governments and their regulations catch up with the technology, their actions might heavily impact the system. Cryptocurrencies are also very competitive with more and more new ones popping up all the time, with most of them being very risky and uncertain investments. (Johannson, 2018.)

China has also recently banned initial coin offerings (ICOs), which are equivalent to initial public offerings for cryptocurrencies. South Korea is also considering closing cryptocurrency exchanges, which would further limit their use and weaken their position. (Grant, 2018.)

Conclusion

Should you invest in cryptocurrencies? There are a lot of got-rich-quick stories but at least double the number of ”lost everything” -stories about cryptocurrency investment. While cryptocurrencies have been booming for a while, they are still relatively very new, making them risky and wildly speculative. While they may seem difficult to understand, cryptocurrencies might be more and more relevant in the future, especially in finance and investment. The Internet is full of information about them if you want to learn more but stay critical and avoid sites that are pushing an agenda, either for or against cryptocurrency.

All sources are from well-known business magazines.

Sources:

Grant, Clark 2018. How China’s Stifling Bitcoin and Cryptocurrencies. Bloomberg Technology.  https://www.bloomberg.com/news/articles/2018-01-09/how-china-s-stifling-bitcoin-and-cryptocurrencies-quicktake-q-a                                                                              Read 24.3.2018.

Johansson, Anna 2018. Should You Diversify Your Portfolio With a Cryptocurrency? Inc.
https://www.inc.com/anna-johansson/should-you-diversify-your-portfolio-with-a-cryptocurrency.html

Read 24.3.2018.

Rossow, Andrew 2018. Decoding Crypto. Forbes. https://www.forbes.com/sites/andrewrossow/2018/02/08/decoding-crypto-5-things-millennials-should-know-before-investing-part-1/
Read 24.3.2018

Solon, Olivia 2017. A simple guide to Bitcoin. Wired.
http://www.wired.co.uk/article/bitcoin-101
Read 24.3.2018.

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Easy money

Investing in Bitcoin might sound like a good idea since many have made millions from doing this but if you are thinking of it, please don’t. This insanity of investing in cryptocurrencies has gone so far that people sell their fortune to buy bitcoins, and this is all because of the speculation that the prices will go up again. The thing in cryptocurrencies is that people bought them in the past, which drove the prices crazy high and this made people even more hungry for bitcoin.

I like the way The Guardian’s article: “So you’re thinking about investing in bitcoin? Don’t” compares bitcoin to a cancer-pill. It might be very valuable but how much is it worth? There is not an easy answer for that. What I have learned also in life is that there is not such a thing as easy money. Some people might benefit from investing in bitcoin, but they were the early birds who did it when no one even knew about it. Let’s have an example. Erik Finman, 19, was one of the youngest bitcoin investors and he later became a bitcoin millionaire, reports CNBC. He began investing in bitcoin already in 2011.

IMG_6391Many people try to find the easy way to get money as much and as fast as possible. But investing your money needs patience. There is no such thing as an easy way. People also see investing differently. Some invest in themselves while others don’t buy anything. I myself try to enjoy life and live it to the fullest. That is why lately I have been travelling and doing things I really enjoy. As I see it, investing in what you really enjoy is way more important for me than saving it for later. But of course, everyone can invest their money and time in whatever they see important for themselves. For some money is everything and for others living the life is what matters.

 
Sources:

 

The Guardian 2018. So you’re thinking about investing in bitcoin? Don’t. https://www.theguardian.com/technology/2018/jan/15/should-i-invest-bitcoin-dont-mr-money-moustache. Read 13.3.2018.

 

CNBC 2018. This 19-year-old bitcoin millionaire offers ‘crucial’ advice for young people looking to invest. https://www.cnbc.com/2018/01/24/19-year-old-bitcoin-millionaire-offers-crucial-investing-advice.html. Read 13.3.2018.

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The national incomes register will be deployed in 2019, how does it affect the citizens?

The national incomes register will be deployed on January 1st2019. There has already been a lot of talk about how it helps companies and state authorities by gathering all the employee information into one place. What is less talked about, but just as important, is how it affects employees themselves.

What is the national incomes register?

The national incomes register is an electronic database that will gather up all the employee benefits and earned income into one place. It will replace the forms that are currently submitted for the Finnish tax administration, unemployment insurance funds and other authorities. The information will be reported for the incomes register monthly and not later than five days after the transaction, so the register is always up to date. In 2020 the incomes register will be expanded to include pension incomes and benefits such as study grant and unemployment benefit.

You can read more about the incomes register here.

What does the national incomes register mean for citizens?

As an employee you don’t have to worry about transmitting the information to the register. That is done by the company you work for. What this means is that you don’t have to do anything yourself. However, there are some benefits that the incomes register brings to all the citizens. For example, as a student you will no longer need to send your payslips to Kela for your student grant, as Kela will be able to have that information from the incomes register. This will also apply to all the other benefits from Te- offices and Kela.

You will be able to view your own earnings, pension and benefits information at the incomes register’s e-service in real time. You can also order a report from the incomes register stating all your earnings, pension and benefit information, that can be useful for example in applying for a loan.

There are also predictions that big tax refunds and repayments will be history. This is because there is more correct and up to date information for tax authorities to prepare the tax deduction cards.

Where to go with the incomes register?

There has been a statement from Finanssiala ry’s leading expert Timo Tuominen, that the incomes register should be opened for third party use, such as banks, if the employee gives their permission. This could help banks to check borrowers’ earned income when granting a loan. This would make the applicant’s work a little bit easier.

Finland’s government and assisting professionals have gotten to know other countries incomes registers in preparation to make one for Finland to make it as good as possible. Still there is always room for improvement and only time will tell how it works.

Sources:

Verohallinto 2018. Incomes register, Individuals. Https://www.vero.fi/en/incomes-register/individuals/. Accessed 8.5.2018

Verohallinto 2018. Tulorekisteri: Mikä muuttuu palkkojen ilmoittamisessa 2019? Https://www.vero.fi/globalassets/tulorekisteri/esitykset/verkkoseminaari_helmikuu.pdf. Accessed 8.5.2018

Finanssiala ry 2016. Kansallinen tulorekisteri hyödyttää koko yhteiskuntaa. Http://www.finanssiala.fi/uutismajakka/Sivut/Kansallinen_tulorekisteri_hyodyttaa_koko_yhteiskuntaa.aspx. Accessed 8.5.2018

 

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Why bitcoin will eventually fall and why is it a good thing?

Bitcoin is merely a symptom and was born because countless of banks aren’t trustworthy. Bitcoin offers an alternative for facilitating trade, thus a new currency. A currency that can be used from anywhere in the world, by anyone who has an internet connection and a decent device. Better yet, without intermediaries like banks. If it’s so good, why would such a revolutionary currency fail?

There are numerous cases of how bitcoin could fail. So far, a government ban has been the strongest force against the bitcoin usage. But if bitcoin manages to survive long enough, what will be the final destruction? The essential part can be found in the bitcoin’s code itself: there is a cap of 21 million bitcoins that can be mined. To answer the main question, we first must look of how the mining process is likely to stop after all the 21 million bitcoins have been mined.

 

Miners keep the bitcoin’s network operating, by mining new blocks to the blockchain. Blocks can be mined by using a computer’s computational power to solve pointless, difficult algorithms. Therefore, a great extent of electricity is required. Of course, miners’ incentives have to be aligned to use costly power to produce new blocks, hence they get rewarded by bitcoins. When the 21 million cap is reached, miners don’t get compensated by mining new blocks. In other words, miners are required to maintain the blockchain and when the 21 million cap is reached, it is mandatory for miners to get higher compensation from transaction fees. One reason why bitcoin has been adapted by users, it’s because the transaction fees are significantly lower than sending for example US dollars. But why would the increased transaction fees fail bitcoin?

In the beginning, I explained that bitcoin is an alternative for previous currencies. Since bitcoin was launched, several other cryptocurrencies have been created with different features. As bitcoin’s transaction costs rise, so does the demand for a cheaper currency. Consequently, we will see other enhanced cryptocurrencies to develop as requirements and technology advances. But bitcoin shall not be forgotten. Most importantly, bitcoin’s underlying technology, blockchain technology, introduced us  a clever solution for the byzantine general’s problem. An instrument for people to decentralize trust. As this tool is now available for us, who knows what the future will look like in terms of breaking centralization and establishing more democratic decentralisation. Therefore, bitcoin has served its purpose.

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