Accounting in a smart city with the combined use of the Internet of things and geographic information systems

Source: developed by the authors

The combined use of GIS and IoT contributes to the optimization of accounting and management of transportation flows in a smart city. The functioning of passenger transport in a smart city is aimed at minimizing the time and costs involved in the spatial movement of residents [12]. IoT technology is used to identify passengers in places of their stay, such as public stops, various types of transport, waiting or rest halls of transport infrastructure, and so on. Information about the number of passengers, time spent, and routes travelled is used for autonomous management of transportation flows in a smart city. However, this data is also a valuable information resource for digitizing accounting and managing the activities of passenger carriers. Transport companies are also interested in the data provided by IoT and GIS technologies for optimizing their financial and economic activity at the micro level.

In particular, depending on the number of passengers transported or the duration of the travel, it is advisable to calculate the cost of transportation services provided, taking into account a smart city zoning. Transport costs and revenues of carriers may vary depending on the route in the transportation network. The routes that connect densely populated residential areas of the city, industrial or commercial establishments, city centre or historical landmarks, are usually more profitable. The popularity of transport routes involves the use of a larger number of vehicles with a significant number of seats. This leads not only to an increase in expenses for the depreciation of transport, fuel and energy resources but also to an increase in expenses for labour compensation, social insurance, and other operational measures.

Transporting each passenger increases the carrier's costs. However, the distance travelled by each passenger using public transport is also necessary for calculating the cost of transportation services. Organizing short transport routes that connect several public stops requires minimal transportation costs, while it works differently with long distance routes between different residential areas or city zones. Accordingly, the “passenger-kilometer” can be used as a calculation unit in accounting for the cost of passenger transportation services. A two-component metric takes into account the number of residents transported in the smart city, information about which is provided by IoT technology, and the spatial distance travelled by each passenger, according to the GIS system. All costs related to the transport operation (fuel and energy resources, depreciation, and driver salaries) and servicing residents (cabin maintenance, passenger insurance, conductor and inspector salaries) should be calculated based on the number of passenger kilometers of passenger carriers.

Based on the identification of facts of passenger boarding (alighting) from public transport in the smart city's route network, the cost of transporting one person can be automatically calculated. Taking into account the required level of profitability after providing transportation services, each passenger can be informed about the variable cost of moving within the smart city. In the case of electronic ticketing systems, the cost of transportation services can be automatically debited from the passenger's account with corresponding reflection of revenues and cash receipts in accounting.

It works differently with electronic travel documents with a predetermined number of trips regardless of the zoning of transport routes. The revenue from the sale of electronic tickets is fixed and reflected in the future income. Writing off future period income in current financial results can occur after the passenger's trip or at the end of the reporting period. At the same time, the costs of providing transportation are reflected in the cost of services provided by carriers in proportion to the number of passenger-kilometers within the service package according to the terms of the travel document.

A similar methodology of digitizing accounting in the transport sector can be applied to calculate the costs and revenues of parking operators in municipal areas. Zoning of urban space affects the cost of parking vehicles. In the central zones of territorial public entities, the payment for rental parking spaces is relatively high. However, in geographically remote areas of the city, the cost of parking may be lower. In the conditions of a smart city, it is possible to identify the spatial location of cars based on a complex combination of IoT and GIS technology capabilities. In this case, it is appropriate to automatically calculate the cost of parking for each vehicle depending on the parking locations during the day.

Depending on the location of parking zones in urban areas, smart city operators' expenses may vary. Variable operating costs for parking operators include the cost of renting private or public space; taxes and fees to the city budget for providing municipal services; servicing, cleaning, or security services; electric vehicle charging capabilities; additional passenger amenities; payment for the work of inspectors, cashiers, municipal police; the use of evacuation tools, etc.

It is advisable to use a universal metric to fully account for the expenses of parking operators - the “car-hour” of parking. Operating with a two-dimensional calculation unit makes it possible to calculate the time that vehicles spend in parking lots in accounting. Taking into account the number of car-hours of parking zone operation, it is possible to establish a correspondence between the operating costs of operators on the one hand, and revenues from providing parking services that take into account the duration of vehicle parking on the other.

Based on the cost of “car-hour” of servicing transportation for each parking space, the final cost of parking services can be automatically determined. The final cost of services for each driver during the reporting period depends on the zoning of the transportation in parking spaces with different costs, including free parking. The final cost of parking services is either communicated or automatically collected from the owner of the vehicle. The revenue from the sale of monthly parking subscriptions in urban zones is the income of future periods for parking operators. Accumulated future period revenues are proportionally written off together with the occurrence of operating expenses for the operation and maintenance of smart city parking zones.

One of the important cost items in the cost of services in the transport sector is fuel and energy resources and municipal services. Active development of electric transport and the transition of production to “green energy” leads to the significant increase of electricity bills. To ensure effective accounting and control of expenses for municipal services in smart cities, it is advisable to use automated metering devices that operate on the principles of IoT technology. However, the location of automated meters for municipal services such as electricity, water, natural gas, etc., is also important for accounting and management purposes. Therefore, the combination of functional capabilities of geographic information systems and IoT technology is important in smart cities. The use of GIS provides the smart city management system with information both about the territorial location of automated metering devices and but accounting of the internal spatial use of energy resources.

In addition to information about energy consumption, each automatic metering device reports on the location of any business entity and the entire smart city on an electronic map. In urban areas, automated meters can be integrated into municipal infrastructure objects, such as street lighting elements, electronic terminals, public information monitors, road control systems, and so on, making it practical to equip them with individual energy meters. Metering devices can automatically collect data on consumed services for any period and quickly transmit it for further accounting procedures. It is advisable to assign a personalized (individual number) for each metering device to account for the occurrence and settlement of debts for utilities.

When the functioning of infrastructure objects with built-in metering devices is part of the main activity of municipal institutions, energy consumption costs become production ones. It is the cost of the period of the business entity that owns the infrastructure equipment. The location of the business institution or its equipment in the smart city space is also vital. More advantageous spatial-territorial placement of economic institutions or their equipment can increase the cost per unit of energy consumed. That is, the cost of utilities may differ in certain areas of the smart city. It is necessary to consider that infrastructure equipment can be mobile and change location during the reporting period. The mobility of such objects requires determining their precise location based on data from geographic information systems to change the pricing of electricity, water, and natural gas consumption in different urban areas.

The cost of a unit of energy resources used may also vary depending on the time of day, season, consumption volume, etc. In the operation of automated energy resource meters, it is advisable to provide for the possibility of quick adaptation to tariffs changes. Therefore, energy consumption meters should be refined basing on the location of the consumer of communal services. In other words, automated meters can adapt the cost calculation algorithm for communal services for the reporting period based on variable factors. The consumer and the provider of communal services must transmit information on consumption volume and its cost simultaneously for further accounting of energy resources. If such information is the basis for operational revenue accounting for business entities providing relevant services, then for energy resource consumers, it is operational costs of various kinds.

Depending on the functional purpose of the premises with an installed automated meter is, it is advisable to separate accounts for the consumed energy resources. The cost of consumed energy resources should correlate with the structure of general production, administrative, sales, or other operational costs for each day or work shift. Impossible identification of the functional purpose of premises, territories, shared areas, etc. means that the bills for received communal services should be clustered and transferred to various expense accounts at the end of the reporting period. General production costs in terms of services should be automatically distributed proportionally to the amount of products manufactured, which ensures the determination of the full cost of finished products.

However, energy consumption as part of production costs is possible if production equipment with automated energy meters. Robotic equipment is capable of calculating the costs of utilities for the production of each unit of product, providing the basis for organizing identified cost accounting. In other words, using IoT technology in conjunction with GIS helps to calculate the share of electricity, water, natural gas, and other utilities in the cost of finished products, semi-finished products, In addition to the economic and ecological use of natural resources and electricity, the residents of the smart city are interested in protecting the environment. The information environment of the smart city integrates a branching IoT sensor network that parameterizes the conditions of the environment regarding the urban space. In the smart city, it is possible to identify the popularity of the urban objects among residents, the level of environmental pollution, the level of road congestion, access to municipal services, and so on. The parameters of the urban space determine its priority for physical and legal persons in terms of economic or residential location. Thus, certain spatial and territorial zones of the smart city are better for living or locating businesses. The municipality can impose different fees for renting municipal premises or land plots. Similarly, local taxes can be higher for objects in better spatial and territorial locations

Quick adaptation of the rental fees and taxation scheme to changes in data from the relevant IoT sensors, combined with GIS is advisable. When determining the current conditions of the urban environment, rental rates and local taxes can be reviewed periodically (once a month, quarter, or year). Based on established indicators, it is recommended to automatically generate records regarding the occurrence of arrears of individuals and legal entities to the local budget. In the future, payment of arrears is expected, and delay leads to automatic accrual of penalty sanctions and fines.

The association of household services and administrative services provided with the place of residence requires an even redistribution of resources in the smart city to ensure an edequate service. For comfortable living in the smart city, the territorial distribution of residents among service institutions matters. In particular, public health care is an institutional sphere, which, in conditions of using an electronic patient record, creates positive prerequisites for optimizing the accounting of medical services. Medical management can use data for medical services, the number of visitors to health care facilities, and information about their territorial distribution in the smart city.

Quantitative accounting is carried out when creating an electronic request for medical services and the patient's arrival at a healthcare institution. Based on data on the number of serviced individuals, it is expedient to automatically calculate additional salaries for medical personnel, write off medical drugs according to electronic prescriptions, depreciate equipment, and reflect the proportion of consumed communal services in accounting. As a result, after confirming the receipt of medical services at a specific healthcare facility, it is appropriate to automatically display its operating expenses and revenues. Revenues may include the income from patients for medical services or fundings allocated by local or state budgets.

However, it is advisable to use the calculation unit for more accurate consideration of all healthcare facilities' expenses end the activation of telemedicine in smart cities - “man-hour” (“man-day”) of providing medical services. Abandoning outdated measures such as “bed-places,” “person-places,” etc., is justified in conditions of transitioning to remote provision of medical services through electronic communications means, which effectively function in smart cities. In addition, taking into account the time parameters in medical services ensures a fair and accurate determination of operating expenses, which complicates machinations in the sphere of medical pricing. It also makes it impossible to use budget funds for unintended purposes, which were allocated to healthcare facilities to maintain one “bed-place.” Patients' and the budget's funds are redistributed between healthcare facilities only according to the number of patients and the volume of medical services. Medical institutions offering better medical services at an optimal cost become more profitable. As a result, reliable pricing in medical services ensures the optimization of healthcare facilities' financial results and the population's medical protection level in smart cities by forming transparent competition.

Other types of services provided to the residents of the smart city can be based on similar principles of transparency, reliability, completeness, timeliness, and fairness in accounting for expenses and revenues. It is advisable to form the dominant aspects of accounting in the conditions of a smart city summarizing the features of the combined use of data from IoT and GIS technologies for accounting purposes (Table 3).

Table 3

Dominants of accounting in a smart city