Digital revolution is on the rise and the field of accounting is also experiencing the impact of new innovations. I can give personal testimonies of software applications which we have used in recent times to streamline operations and enable us to provide quality and innovative services to our clients. In our weekly publications in this paper, we have also highlighted the impacts of innovations in blockchain technology, software robots and machine learning on accounting or bookkeeping. Another technological innovation which is also on the cusp of making significant impact on accounting is the virtual reality.
Generally, virtual reality refers to a technology that enables a user to experience and interact with a computer-generated environment in a way that feels real. Virtual reality uses specialized headsets that feature high-resolution displays, motion tracking sensors and hand controllers. When wearing a virtual reality headset, a user is transported to simulated worlds where they can interact with the surroundings, objects and other users. This way, a virtual reality offers an unparalleled level of immersion and presence, thereby enabling a user to feel as if they are physically present in the virtual environment.
According to Markets and Markets, the global virtual reality market size is expected to reach $ 29.6 billion by 2028 from $ 20.9 billion in 2023 at a (CAGR) compound annual growth rate of 18.0% within the period under focus. The growth of the virtual reality market can be attributed to the increasing utilization of head mounted display(HMDs) across many sectors with end users in commerce, enterprise and healthcare. It is worthy to note that virtual reality takes three (3) forms. These are non-immersive virtual reality, semi-immersive virtual reality and fully-immersive virtual reality. Each one of these forms of virtual reality offers a varying level of immersion and presence and caters for different use cases and budget considerations.
The non-immersive or desktop virtual reality is the most basic form of virtual reality. This type allows a user to experience a virtual environment through a computer screen or a handheld device such as a tablet or smartphone. By its integration with artificial intelligence (AI) and machine learning to improve accuracy, virtual reality is more immersive and engaging for a user. It means also that when users are in that virtual world, they want to be fully immersed into it.
Applications of Virtual Reality
Virtual reality has been applied to effectively train finance professionals to learn and practise new skills, to visualize financial complex data, conduct virtual meetings and presentations. It is has also helped to improve stakeholder communication through remote engagements as well. These applications and other use cases of virtual reality have been explained in further detail.
Visualizing Complex Financial Data
Virtual Reality can be used to create visualizations of financial data and allow finance teams to easily analyze complex financial data. This means, line items such as revenue, costs and profits with the help of a virtual reality can show a graphical trend and allow accountants and decision-makers to understand those complex financial data more intuitively.
As an Emerging Payment Technology
Virtual reality is still evolving and gaining traction in the fintech payments space. It is indeed one of the emerging payment technologies for business transactions. In retail and e-commerce, payments are being integrated into virtual reality to ensure consumers complete purchases without disrupting the experience. Once the transfer of payment has happened, the virtual reality will feed the transaction directly into a computerized accounting system. This will make reconciliation and finalization of accounts process easier and quicker, hence, financial data is available in real-time for planning and decision-making.
Sales & Purchases
As virtual reality continues to evolve, it can be considered as the emerging game-changer in the retail industry both online and in-store. The technology creates a more engaging experience that simulates physical retail stores online and makes a measurable impact in showcasing and selling products. Furthermore, virtual reality has the potential to streamline automation processes in the field of accounting and finance. This will make, for instance, the tasks of stocktaking, invoicing, customer management, auditing of stock and more efficiently.
Regarding inventory or stocks, virtual reality could enable an accountant to know their status and values in real-time. In a matter of checking inventory for bulk orders, virtual reality will boost efficiency and reduce or eliminate costs because it offers a potential customer an opportunity to have a rear view of new products and their specifications without the need to visit a manufacturer’s premises. This will also save time and enhance customer experience. Leading brands aims at exploiting the innovations in virtual reality to create marketing experiences through engagements with clientele. There is a strong proposition that implementing virtual reality will significantly optimize value chain and sales to increase a company’s return on investment(ROI).
Virtual Meetings and Presentations
It is worth reiterating that virtual reality offers organizations the ability to train employees and test procedures with simulation of realistic scenarios. Since virtual reality is able to bring teams together from various locations into a single virtual space, the technology can facilitate product development. This is based on the fact that design teams can easily explore, test and effectively evaluate many concepts without necessarily investing in prototypes or samples. The potential benefit is that an organization can bring higher quality products to a market faster. Aside from that, virtual reality could be used to conduct meetings and invariably empower finance professionals to collaborate effectively without the need to travel and converge at one physical space. In the same vein, virtual reality can offer stakeholders especially an investor the opportunity to embark on a virtual tour through a company’s financial statement in real-time to make investment decisions.
Challenges
Without a doubt, the emergence of virtual reality adds to the array of new technological applications transforming businesses. Despite the benefits, there are challenges which must be resolved to engender its widespread adoption. The cost of equipment can be prohibitive for many organizations especially small and medium scale industries(SMEs) and individuals to deploy it. Nonetheless, as the technology evolves, the acquisition cost could decline when the market expands and sees more organizations adopting it in their businesses. Moreover, the application of virtual reality in accounting requires data privacy and security, given the sensitive nature of financial data. In addition, since virtual reality requires users to wear headsets, it could cause motion sickness and discomfort to people when they stay longer time on it. That said, immersion in virtual world can only work properly with sufficient computing power and memory. This challenge needs to be resolved as well to ensure holistic user experience and benefits.
Conclusion
Virtual Reality intends to bring a paradigm shift or innovations to all sectors, with my focus on how it will have impact accounting and business. Thus, by visualizing complex financial data, improving stakeholder communication, improving education and training as well as enabling remote work, the influence of virtual reality to make accounting more engaging, intuitive, and effective cannot be underestimated. But as we explore the benefits we must also address the challenges that lie ahead in our quest to harness the full potential of this application in the modern world of technological possibilities.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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