Streamlining Accounting Processes



When two or more parties agree to automate their business processes using smart contracts, they are in a great position to streamline further accounting operations. Smart contracts are vehicles for standards. All of the transfers executed by a smart contract will be recorded on the blockchain in a structure which is easily understood by other business systems. In addition, the smart contract may have supplemental information about the transfers that happen as part of the “shared business process” — providing multi-stakeholder visibility into transfers and their supplemental data on the blockchain as a result.



Companies or individuals who use a blockchain to automate the various processes involved with the sale of a good, for example, will store the associated transfers and supplemental data about each transfer in a uniformly structured smart contract (or, in some cases, in near-chain storage referencing the smart contract). Since the data is standardized, it can be referenced to automatically classify each of those transfers. Usually a bookkeeper would analyze each of the transactions and classify them in order to represent them in financial reports such as a balance sheet. However, since the blockchain has aggregated the transfers and included (or linked to) data reflecting their purpose, the bookkeeper role can become streamlined and automated. The result is a shared trusted process between multiple transacting parties that also enables each party to create self-generating financial reports — if they’re using a second layer technology such as Balanc3.

Streamlining from the Smart Contract to Financial Reports

Crypto Dependent



For this interaction to take place seamlessly, companies must transact in digital assets. If Company ABC wants to buy a good from Vendor XYZ through the “shared business process” they created, Company ABC must pay with a digital asset, and Vendor XYZ must accept a digital asset and send an asset-backed token.



Currently, there are many blockchain businesses that have raised a digital asset in a token sale and want to pay for goods and expenses with their own or other digital assets. If they are paying employees and the employee wants to accept the digital asset as payment for services, then the shared business process works. However, if the blockchain business wants to purchase a good from Vendor XYZ, then Vendor XYZ must accept a digital asset and their goods must be in the form of a digital asset. The acceptance of digital assets as a form of payment is being adopted to an increasing degree — recently all major browsers implemented a payment request API that allows the payment of Bitcoin, Ether, and other traditional payments. Many goods are also being tokenized into digital assets by blockchain businesses such as LAToken, Coin Circle, etc. With the adoption of digital assets more opportunities open to execute business processes in a shared data environment.

Prepare for a Data-Shared and Streamlined World



The development of business activity smart contracts and their resulting streamlined accounting processes are on Balanc3’s road map. As more token sales, digital asset acceptance, and digital asset creation take place the world is being prepared for improved interactions between businesses. There are situations in which operating businesses can already perform some of their functions through shared business processes and continue to grow.



Sign up to receive updates on Balanc3. Our website is launching soon.

Like this piece? Sign up here for the ConsenSys weekly newsletter.