Blox commissioned a new report to discover more about the next generation of crypto accounting and why today’s crypto CPA experts decided to transition their profession towards blockchain and crypto accounting services. Blox developed a series of questions that probed experts from across the USA which illuminated interesting facts and highlights the ever-growing need for smarter solutions that address the evolving world of accounting for cryptocurrencies.
The purpose of the report is also to discover the unique and individual challenges of accountants and financial professionals for cryptocurrencies. It is imperative to understand the technical challenges and limitations these professionals face and identify what solutions they need to improve their services. Moreover, we want to better understand these professionals unique perspective and approach to crypto accounting and bookkeeping in light of lacking legal regulation and governance framework for taxation and compliance.
As true professionals, these experts have taken the liberty to provide a unique service and a niche for rapidly growing and wide-range of customers. The insights that were found, and the truth that was uncovered unequivocal signals that the world of crypto and accounting are forging a synergistic relationship – one that will surely change their respective domains.
The five questions we asked were simple, direct and made to garner insights by comparing and contrasting the consistency of answers from each expert.
The questions are as follows:
- What was your journey into cryptocurrency like? What initially caught your attention and why?
- When did your firm begin offering crypto accounting as a service? What specific services do you offer to crypto clients?
- What are the top three mistakes you see crypto clients make when it comes to accounting?
- What are the top three challenges when it comes to accounting for crypto?
- What Is the future of crypto accounting?
Why did these professionals pivot to crypto? According to the report, 97% of respondents entered the crypto accounting space in 2017 after self-interest in blockchain and crypto. The same 97% also had clients that began to heavily invest in crypto, and when they approached their accountants, they realized there was no law or best-practices, and they are seeking to change that.
It comes as no surprise that these are the reasons to pivot into those niche accounting service. Especially when considering that 98% of respondents believe that a lack of understanding over crypto tax laws and compliance is one of the three biggest challenges for crypto accounting. Their jobs become even more difficult when customers or crypto exchanges have missing or inaccurate data (98%). With poor record keeping and organization being the third biggest crypto accounting challenge (87%), it’s obvious that there is a growing need to solve these challenges.
Blox has already developed solutions that precisely target these challenges and more. After reviewing the results of the report, we were immensely satisfied that our platform is moving in the right direction. From the start of Blox, we provided unique classification and labeling solutions that provide finance teams with an easier way to organize and classify accounts, portfolios, and transactions. Rather than focus on manual data entry and spreadsheets, Blox streamlines the entire organizational workflow.
It’s not enough to simply stay organized. CPAs and bookkeepers need to know they are working with all the necessary and accurate data information from exchanges, wallets, and custodial solutions. Anything less leaves holes in the data that leads to inaccurate calculations. Blox’s API technology fills the gap by constantly fetching accounts and transactional data in real time to provide the most updated and accurate information. Not only does Blox fill in the gaps, but they are focusing on providing continuity of data, even when the data is expired from the exchange. A feature with immense importance.
We also discovered that crypto CPAs have all faced three of the same mistakes and issues when it comes to the practice and application of crypto accounting services. For example, 98% believe that missing and inaccurate data leads to the most prominent accounting mistakes. While 95% of respondents found that many of their clients failed to disclose all their assets/transactions for tax reporting.
Fun fact: Many respondents told stories of how their clients felt it was not necessary to report all their assets and transactions because they felt it was not yet mandatory in the eyes of the law.
When addressing these challenges, mistakes, and potential for errors to arise, it is essential for the future of crypto accounting, to educate and enlighten clients, other CPA professionals and the world at large.
These professionals wrapped up their responses by addressing what they believe the future of crypto accounting is to be. Almost all respondents strongly believe that CPAs and the world of cryptocurrencies will see the necessary legal framework and guidance take form.
Fun fact: 72% believe that CPAs, professionals, and investors will be educated on crypto accounting and accompanying solutions and best practices.
This new and brave world of crypto accounting is continuing to evolve and transform, and Blox is at the forefront. The web-based and app platform is already capable of arming crypto accountants and bookkeepers with smarter and innovative tool-based solutions. It’s companies like Blox and other forward-thinking organizations and coalitions that are working hard to develop a crypto accounting ecosystem where professionals and companies work together to change the future.
The Blox Crypto CPA Expert Report 2019 will be released soon. Please stay tuned to receive and review your copy!