Blockchain, Bitcoin and crypto currencies are the new buzz words in todays era. The most common word that follows is disruption! Why are people proud of disrupting industries?
Spoiler alert we too are proud of disrupting the ACCOUNTING INDUSTRY
Double entry & a multi billion dollar yearly problem!
Accounting is governed by double entries. Each transaction has two components, a debit and a credit, which when added up together must balance. This was the breakthrough in accounting….in the 11th century AD…and has remained the foundation of today’s accounting.
It works by having different businesses keeping their accounting transactions isolated from each other. Businesses receiving invoices have to duplicate the invoice which was received in their isolated records. When payment is made, the business receiving the payment must duplicate this in their own isolated records again.
Let’s take a real life example of a grocery store buying milk from his supplier. The supplier records the sale made to the grocery store and the amount which the grocery store has to pay.
Independently of the supplier, the grocery store has to repeat the transaction in its isolated accounting records in the opposite way, it received milk from the supplier and it owns money to the supplier.
The entries done by the supplier and the grocery store are the exact mirror image of each, BUT they are recorded in isolation of each other. The supplier incurs accountancy fees and so does the grocery store.
The same happens when grocery store sends payment. The transactions are recorded in isolation of each other, costing both the supplier and the grocery store more accountancy fees.
A small mistake such as omitting one invoice can easily cause chaos. Reconciliations must be done, causing the supplier and the grocery store more accountancy fees.
This vicious cycle causes the global industry billions of dollars in extra expenses. For small businesses, the double entry system means consumption of a lot of valuable time which may be otherwise invested in value added areas of the business, whilst for larger firms it means employing more and more accountants, resulting in high costs.
Introducing Triple Entries
The alternative to this is Triple Entries. Triple entries connect businesses together. When the supplier invoices the grocery store, the grocery store receives a notification, similar to a friend request on Facebook. By accepting the transaction, the grocery store does not need to record the transaction. It will be automatically recorded once the grocery store responds to the “friend request”. At this stage, the grocery store saved his time and the accountancy fees.
When the grocery store records the payment made to the supplier (which can be paid in crypto currencies), the supplier receives another notification, like a “friend request”, and once the outstanding money has been received by the supplier and responds to the “friend request”, the transaction is automatically recorded in the supplier’s accounting system. At this point, the supplier saved the time and the accountancy fees.
Bye, bye reconciliations. Reconciliations will soon become a thing of the past. The money and time spent to reconcile the transactions will be saved. Records will be automatically recorded. No more room for errors.
The pattern is obvious. Triple entries save businesses around the world a large portion of their accountancy fees and time dedicated to the accounting function as the majority will be automated.
Why The Accounting Blockchain?
For Triple Entries to work, businesses must have a common and trusted platform, which is why triple entries cannot work with a centralised systems. The grocery store does not trust the supplier’s Accounting System and the supplier does not trust the grocery’s Accounting System. BUT, both trust a blockchain, in which records are immutable and cryptically stored by millions of people.
Triple Entries can only work when businesses share a trusted and common ground to record the transactions done by each other.
At Accounting Blockchain, we are proud to be the catalyst who introduces this much required common and trusted ground, THE ACCOUNTING BLOCKCHAIN, disrupting the global accounting industry, connecting businesses from around the globe together without any entry barriers to join operating using AB tokens.
Email : bounty@theaccountingblockchain.io.
join through the below link and get free Accountingg Blockchain Tokens
https://www.theaccountingblockchain.io/?aId=6379706-0775189