Last month I had an opportunity to deliver a professional development session for CPAs at the Allinial Global Technology Fly-In, where I formally announced PayPie’s Single Ledger initiative, showcasing the proof of concept (POC) for distributed ledger technology to industry participants. Just like anyone else who has dealt with anything related to the blockchain in the last few years, I could feel the mix of excitement, curiosity and anxiety in the air.
There was a time when businesses used to have separate accounts receivable and payable systems, then came on-premise systems followed by cloud accounting and software as a service (SaaS). Now there’s blockchain and distributed ledger — the next step in the evolution of online accounting.
Present challenges — without distributed ledger technology
Currently, financial data is often housed inside different accounting platforms and enterprise resource planning (ERP) systems.
Online accounting (cloud accounting) is a revolution with millions of success stories and it has done a great job solving problems that have plagued the industry for years. Most of these systems allow for the creation of accounting transactions and nearly real-time financial statements. They also significantly accelerate the reconciliation process. The result is a wealth of valuable business data.
But, all this crucial information is often siloed and there’s no universal system for sharing it. All these systems look like an isolated collection of company intranets — islands of data that often fail to extend past the edge of the business.
Anytime a business has to deal with an external third party, the processes for transmission and verification of this data through APIs still require a lot of manual review and cross-checking. Dealing with a counterparty, even with the most diligent efforts, is time-consuming and prone to errors.
The issue of siloed information is a global challenge across the entire financial services industry. (Actually, almost every industry. But for this post, let’s stick to accounting.)
Next steps — breaking down barriers
The future of the accounting industry lies in collaboration. At PayPie, we’re heading up efforts to facilitate this innovation in the form of our Single Ledger initiative. We have developed a blockchain-enabled technology that will create a global system of trust to connect all these disconnected dots.
The future — distributed ledger technology and global digital IDs
One of the most revolutionary things about Single Ledger is that we are able to assign a unique blockchain-powered global ID to every business through their online accounting system participating in the network.
Through this ID process, all parties within the network are able to identify, validate and trust the information provided. This potential has never existed before and was not even possible before blockchain. Benefits from this global system of trust include:
- Cryptographically created blockchain IDs that can connect any business in the world using an online accounting system.
- This same cryptography makes data on the blockchain permanent and immutable. It cannot be changed, altered or modified.
- Data entry, transactions/settlements will take place in near-real-time.
- End-to-end transparency will eliminate the need for middlemen and costly, time-consuming third-party clearing houses and validation processes.
The mission of PayPie’s Single Ledger initiative is to connect businesses in order to further develop a trusted, self-validating ecosystem with the potential to radically change current business models.
Here’s a video example:
The heart of the evolution — collaboration
If you are an online accounting and/or financial data producer, a vendor using an online ERP partner with us to advance the potential of this technology.
As a participant in the ecosystem, you’ll ensure the authenticity and origin of the data that originates from your accounting platform. At the same time, your customers control who they would like to share data with, just like they do now.
Single Ledger ensures the integrity of the data and provides automated guaranteed delivery for all the transactions to the counterparty.
The more participants we engage, the sooner we’ll be able to usher in the next generation of online financial information and end “garbage-in, garbage-out” (GIGO) problem.
Current data import and extraction systems, including OCR, are clunky. Together, we can automatically and accurately code all transactions and do all the heavy lifting of bookkeeping — saving our customers (and ourselves) from endless hours of data entry.
In the same way that cloud computing has changed the way software is used and distributed, Single Ledger will transform how accounting data is authenticated at the origin, validated and shared.
Here is a proof of concept demo of the Single Ledger in action narrated by Single Ledger’s CEO, Nick Chandi:
Keeping facts while removing friction
Who knows… with the adoption of Single Ledger, we may not even need invoices by 2028! When users assign permissions to their data from the accounting platform of their choice, they remain in the driver’s seat while controlling the usage of the shared data.
Rather than financial information being passed back and forth like a frantic game of ping pong, Single Ledger may change the game entirely. Through the evolution of Single Ledger, the ball may one day stay in one place, in their accounting system — where everyone can access it simultaneously, a dream come true for vendors, auditors, lenders, banks and tax authorities.
Together — we can make the next transformation happen
We’ve begun an industry-wide initiative to engage more thought leaders, build a multi-faceted data ecosystem and develop further use cases based on the blockchain economy. I foresee a vibrant and robust environment where information sharing is automated via smart contracts — created, owned and executed by business users.
- Let’s take the heavy lifting out of accounts receivables and payables — creating win-win collaborations.
- Let’s reduce the cost of doing business by letting stakeholders place greater trust in your customers.
- Give businesses greater power and control over their financial data.
Join us today and enhance this system of trust — Single Ledger!
Stock images via Pexels.
Distributed ledger infographics via singleledger.org.