Blockchain in Accounting:
An Extensive Guide

Blockchain in Accountin

The public blockchain revolutionises accounting by introducing a single shared base layer of bookkeeping. A global public blockchain network facilitates peer-to-peer trusted data exchange and interoperability without needing a trusted intermediary.


Accounting is the most direct use case of blockchain. The blockchain is a network that has no dependence on a single service provider and ensures the integrity of records.

Over the past years, many finance and accounting organisations have looked at blockchain’s impact on their business. Some organisations even have tried to launch pilots using the new technology.

The technology is more complex than people think, as many pilots have failed to gain mainstream adoption, and we are now in the ‘Trough of Disillusionment’ stage. This stage is characterised by the hundreds of separate blockchain systems we have today that are incompatible and introduce the very thing that blockchain aimed to solve; interoperability through a single shared source of truth.

Hypecyle by Gartner

We are slowly climbing the slope of enlightenment as the market gets more educated and understands that blockchain does not solve the generic challenges that standardisation proposes. It is now that pioneering organisations investing in research & development can establish themselves in this new stage the internet is moving in.

Swedish software company VISMA, a provider of accounting software with 15.000 employees and €2B in yearly revenue, is one of those pioneers. VISMA has taken a strategic leap to develop a pilot that differentiates itself from prior attempts: using a single global public blockchain.

VISMA | yuki has connected its accounting platform to the blockchain to authenticate invoices for enhanced security and automation. This application of blockchain in the accounting suite has the potential to enable efficiency in the accounting processes and build a new foundation for future innovations.

Three examples of Blockchain in Accounting fails

In the accounting sector, the blockchain is often referenced as merely a technology.

Accounting software providers forget that blockchain is a network protocol, which implies that blockchain’s value is delivered only in the context of connecting multiple independent entities.

Niels van den Bergh, CEO at mintBlue

Today we see the blockchain used in different contexts that do not reach adoption. The primary reason for this is a need for more education about the various aspects of the protocol.

Three contexts that commonly don’t reach adoption include:

  1. The use of a blockchain within a single siloed company.
  2. The use of so-called ‘layer two’ solutions. 
  3. The use of private blockchain implementations.

Below we will break down the challenges that come with the above implementations. Afterwards, we will go back to the root of the problem that blockchain aims to solve, followed by the most viable solution to address these challenges now and in the future.

1. Blockchain within a single, siloed company.

You often see organisations advertise blockchain as part of their solution offering. More often than not, they have deployed blockchain technology as a single-point solution in this case. No independent other party participates in the network, and the solution provider fully controls it. 

Even if the company claims to offer transparency or data ownership to its users, the company often is the custodian of the keys of its users, which means they can access and decrypt user data. Also, working with your blockchain network allows the company to alter the records as they control all network nodes, defeating the blockchain’s purpose.

In these cases, it is more often a PR stunt than a blockchain implementation.

2. Blockchain with ‘layer two’ solutions.

We put ‘layer two’ in hyphens because these are more accurately described as protocol gateways. The blockchain industry tends to change established definitions to market and sell their solutions to organisations and investors that lack the education to see the difference and the implications of it.

Applications built on a layer two blockchain lose inherent properties that come with blockchain. Let’s unpack that.

Application layers, the OSI model and protocol gateways

When looking at the Open Systems Interconnections (OSI) Model, we can see layers in a protocol stack that must sit directly on each other. Therefore, a ‘layer two’ solution is a protocol layer that sits directly on the base layer protocol.

Open Systems Interconnections Model by Imperva

Today, layer-two solutions do not embed in a base layer blockchain protocol. Instead, they are separate systems connected to the base layer through an API operated by a trusted middleman. Therefore blockchains that portray themselves as layer two are in reality, protocol gateways; access routers to a separate system.

‘Layer two’ loses the critical value proposition of the blockchain

Layer-two solutions pretend they have the same level of security because they are anchored to a base layer blockchain protocol with many nodes. In reality, they lost a critical value proposition of blockchain;  they obfuscate transaction traceability by settling large quantities of transactions from one layer into a single transaction on the base layer. 

They do this to speed up the processing capability of the network. Scaling is the single most significant blocker for more extensive adoption, and the infamous crypto kitties app in 2017 is an example.

Layer two solutions are like sitting in a bar and paying the tab only once when you walk out. It doesn’t honour the granularity and traceability of every transaction of every drink, and obfuscates the public verifiable evidence trail that the blockchain brings to the table.

Niels van den Bergh, CEO at mintBlue

3. Private blockchain implementations

A more common middle-ground approach to blockchain is the introduction of the ‘private blockchains’. These private siloed networks, much like intranets in the 90s, connect a set group of participants. These private blockchain pilots have not seen mainstream adoption primarily because of the following challenges:

Private blockchains have inherent challenges that inhibit the adoption

  • Private blockchains require significant upfront investments.
    • You have to set up your network of nodes that all mirror each other.
  • Private blockchains require more business alignment.
    • Require a consortium with commitment from a group of stakeholders at a given time to make it economically viable. This forces an unwanted ‘waterfall model’ to roll out.
  • Private blockchains introduce compatibility and trust challenges.
    • Over time, multiple blockchains introduce interoperability challenges that you can only solve by introducing a trusted intermediary that facilitates the connection between the two networks, defeating the purpose of a blockchain.

How can the blockchain innovate the accounting sector?

So with all the above in mind, you may ask: ‘How do we sustainably implement blockchain?’.
How can a correct blockchain implementation lead to efficiency gains in the accounting sector?

The fundamental problem that blockchain solves in accounting

Today one of the most significant challenges for companies is sourcing invoices and orders from third parties. These documents come in different forms, from paper or fax to PDF and UBL formats. These external sources must be validated and trusted before a receiver can add the documents to the bookkeeping.

Not having a secure exchange medium for invoices opens the door to fraud and drastically inhibits automation possibilities. Today ERP systems and bookkeeping platforms can automate up to 60% of the bookkeeping, but that number can only increase further as the incoming data is entirely digitised and authenticated.

Niels van den Bergh, CEO at mintBlue

The solution is to have a fully digitised version of every invoice, always available globally, without going through a trusted institution to view it, and digitally sign it by a legal entity for ensured authenticity.

No organisation today can serve this need as that would imply a dependency on that organisation, or does it?

Future Innovations for Blockchain in Accounting

Now that we have a public shared global storage layer that tracks and maintains invoice data and the connected legal entities, we have established a new foundation for innovation and can start thinking further. 

Organisations have now taken ownership of their financial documents and can grant multi-party access to index and view it. 

  • Blockchain allows governments to track invoice flows continuously and do real-time tax payments, digital VAT processing and even monitor money laundering.
  • Auditors can track and monitor transactions happening between companies.
  • Financial institutions can finance and trust invoices in real-time.
  • Social and environmental impact projects can directly tap into trusted bookkeeping, for example, offset certain predetermined goods & services.

The end game of blockchain in the accounting sector is the possibility of a so-called ‘triple-entry’ bookkeeping system, where every credit and debit transaction between multiple companies is interconnected, enabling seamless bookkeeping that can save companies significant overhead in the administrative workforce.

Niels van den Bergh, CEO at mintBlue

VISMA pushes for e-invoicing innovation with one global public integrity network to compete and collaborate.

To address these challenges, VISMA partnered with mintBlue to answer how blockchain could aid accounting software to increase efficiencies. 

VISMA prides itself as a highly innovative organisation that strives to be at the forefront of adopting new technologies. VISMA | yuki eminently has always been at the forefront of robotic accounting and applying new machine-learning techniques to enhance maintaining bookkeeping.

Through many iterations and collaborative design thinking, we have developed a way to exchange complete invoice data in a peer-to-peer and trusted manner. We follow industry standards like the .XML data format using the Universal Business Language (UBL) to write invoice information to the public blockchain so that any traditional invoice processor can process the data. The implementation allows organisations that receive an invoice to retrieve any missing invoice data from the blockchain and validate its authenticity independently. Now the received invoice can automatically be processed by the bookkeeping, saving time for administrative staff.

einvoicing on the blockchain is transparent and fraud resistant.
Multiple accounting stakeholders collaborate on the public blockchain through mintBlue’s infrastructure

Adherence to established standards

The implementation has been through rigorous compliance checks to adhere to the criteria set by the European Union’s Data Act and FAIR data principles:

  • Findability
    • Receivers can find invoices through a public transaction ID. The secret to accessing the encrypted blob is handed over peer-to-peer outside the network.
  • Accessibility
    • We exclusively use industry standards that are open and publicly verifiable.
  • Interoperability
    • Any system can integrate our SDK and connect to the public blockchain; our SDK is open source and can also be implemented independently from mintBlue. Users have no vendor lock-in with mintBlue.
  • Reusability
    • Data published on the public blockchain is composable and can be repurposed for other uses.

Immutable storage for financial documents

Users of VISMA | yuki have become ‘data owners’ of their financial data. The integration of blockchain led to the decoupling of data and software. Historically, platforms always locked data into themselves. Today the software has turned into a tool that interfaces with your data stored on the blockchain and can direct this information to your needs.

Becoming a data owner implies ‘taking ownership of’ data. You have absolute data control over where your data can be interfaced and used, but it is your responsibility as long as it is within the legislative framework. 

It also implies that the digital signature you use to publish information on the blockchain is connected to your legal identity. We have partnered with the Dutch Chamber of Commerce to facilitate this in The Netherlands and work with Qualified Trust Service Providers (QTSP) in other countries to fulfil that role of trust.

In the coming decade, demand for digital identity solutions will create a market for QTSPs. Individuals and organisations can choose which QTSP they want to attest to their digital signature on the blockchain. This introduces a network of portable digital signatures that can be interfaced, trusted, and leveraged in multiple applications and interfaces. This brings trust not only to exchanging invoices but could be extrapolated to any information type, from media to articles, to credentials and any other type of asset.

When you overstep and break the rules in the context of accounting and commit financial fraud, you are not automatically caught. It means there is an immutable evidence trail at all times, so authorities have a paper trail to investigate what happened and enforce the law whenever a dispute arises. 

This is contrary to what happens today on the internet. Because of the need for more tooling for authorities, large data scraping practices and back-door deals with large platforms ensure that investigations are not targeted but very broad. Privacy concerns around this practice lead to widespread societal tensions towards governments and big tech platforms. Implementing a global storage layer that establishes a paper trail of online activity poses a viable alternative strategy.

Multi-party access rights for every invoice

Integrating blockchain into accounting systems enables a more organised view and provenance of information. Storing public blockchain data creates a global reference to any piece of information, and it keeps everyone in sync and on the same page as to current state affairs. 

Centralising data in a distributed ledger also streamlines data exchange securely and competently.

The European Union is introducing new regulations in the coming years regarding continuous transaction control of invoices. This practice will be mandatory over time as a 5 billion VAT gap in Europe needs to be patched.

Niels van den Bergh, CEO at mintBlue

There are many alternative ways to perform continuous transaction control. For instance, Spain has made it mandatory to add the tax office in the cc for every invoice you send out.

Leveraging the public blockchain, it is a straightforward multi-party encryption technique to allow your local government to tap in and ‘listen’ to invoices your organisation is exchanging with externals.

Tamper-proof audit trail of the invoice lifecycle

Today the procurement cycle is broken up into many data silos that have an incomplete view of the invoice lifecycle. mintBlue or an equivalent integrator can connect any actor in your value chain to this single storage layer. 

The append-only nature of the blockchain ensures actors are held accountable for their actions. When an error is made, an actor can only write a new entry to straighten the record. This way, the blockchain becomes the source of truth. Interpretation of the data is subjective and, upon a dispute, requires mediators and traditional laws and courts to interpret.

A single global state for network resilience

The nature of the public blockchain is that it has 100% availability and resilience; this makes for the security argument of a blockchain, as availability is a critical part of security that is often overlooked.

Financial systems integrated with the blockchain have an immutable backup of the state of things that systems can resync from the blockchain. Systems can crash or lose an internet connection, get hacked or be taken hostage in a ransomware attack. The blockchain acts as a backup network that can be resynced into your private systems.

Private but traceable bookkeeping information

Financial information is encrypted using two layers (A256GCM, A128CBC-HS256), and every piece of information is sharded and obfuscated by the terabytes of data processed by the blockchain. This makes it nearly impossible for attackers to identify which data blob to attack and requires the attacker to crack two layers of encryption. 

Additionally, this makes the argument for more enhanced privacy compared to traditional server infrastructure; common practice is centralising all customer data in a privacy-siloed database, making it much more prone to data leaks and large-scale inspection of source data. 

In addition to the encrypted payloads, public key threshold schemes allow for complete privacy to the public while the end-user maintains a comprehensive view of their data.  With this approach, a new key is generated for every new piece of information you publish on the blockchain. However, through a cryptographic derivation function, it is still possible to prove the identity behind a party, making them legally accountable for the data they upload.

Blockchain in accounting implementation on a technical level

The platform embeds an SDK on the client side that manages the user’s keys to encrypt, decrypt and filter relevant information to the blockchain. The SDK is isolated to make it secure and avoid cross-site scripting attacks, and only predefined scripting commands can ingest actions on the SDK. The key that is generated on the client side can be published with any QTSP that performs a KYC check and adds the public key to their repository.

Identity Verification Process Diagram by Dutch Chamber of Commerce and mintBlue

From that point on, the user can derive sub-keys from their master key to perform certain actions in public. This way, the user maintains complete privacy, making this a zero-trust implementation. Nobody can track what’s yours, not even mintBlue or the QTSP. 

Additionally, there is an economic argument to the security too, where every user would generate new key pairs by uploading further information; the amount of processing power for an attacker to monitor and track activity is simply not worth the investment. Security is not only a technical but an economic question; nothing ever is 100% secure technically.

The implementation’s underlying enterprise blockchain protocol is based on the original Bitcoin protocol. Its protocol is rarely understood, but the UTXO-based nature of the protocol allows for limitless scale at the base layer when operated by professional data centres. The network is fully decentralised, public and permissionless, as data centres are free to come and go at will as long as they follow the protocol rules and local legislation. 

This protocol sets itself apart from ‘crypto’: it is fixed and does not change (just like the internet protocol TCP). It does not have a commercial entity behind it that issues tokens funded by VCs. Due to a lack of organised marketing and PR, the protocol is only rarely used, but it has unprecedented capabilities in terms of compliance, speed, storage, and privacy and is a niche technology that mintBlue specialises in.

Future regulations by the European Union

The European Union, in particular, has been at the forefront of efforts to unify and streamline invoice and document exchange, recognising this technology’s potential to transform how businesses operate.

The European Union is working on the European Blockchain Services Infrastructure (EBSI) to facilitate the network and infrastructure for blockchain-based accounting solutions. 

The challenge, however, is the performance of EBSI when used to process hundreds of millions of invoices for the accounting sector alone. EBSI also focuses on credentials like diplomas, certificates, and many more use cases.

EBSI can act as a certificate authority for identity but will depend on highly scalable secondary networks to process data exchange and storage needs to serve use cases and not inhibit innovation.

As discussed earlier in this article, organisations, including the EU Commission, tend to pull the trigger on a technology choice followed by a ‘not-invented-here’ syndrome whenever a new solution architecture is proposed. An apparent downside of EBSI is the disbursement of the integrity network it causes, as EBSI holds a prominent position of trust. Still, if it depends on third-party networks to serve use cases, it breaks the immutable traceability of transactions that blockchain so effectively offers.


There are several clear use cases for blockchain in the accounting sector. Although many are developing proof of concepts, and some are even piloting implementations, the design choices that are made have thus far led to no adoption at a larger scale.

In this article, we have identified a need for more education as the primary driver of this inhibitor. We unpacked the different design choices that can be made and dissected the opportunities and challenges of each.

mintBlue challenges the status quo blockchain thinking and believes consolidation into a single chain needs to happen before more significant adoption can occur. Consolidation of data into a single blockchain enables tracing of the entire lifecycle of data with ensured integrity and without dependencies on trusted middle-man.

Many understand the value thesis of a single global blockchain, just like the thesis of a single global internet, but only some believe in the technical feasibility of this vision. At mintBlue, we have a clear idea and pragmatic approach to how a global blockchain can achieve this through our integrated partnerships with specialised R&D firms, universities and professional data centres worldwide.

Niels van den Bergh, CEO at mintBlue

One of the primary drivers of the invention of blockchain was the Bernie Madoff scandal was able to run a large-scale Ponzi through running multiple sets of books. This way, he had multiple sources of truth and could swap and trick stakeholders into thinking of different books as authentic.

This is why the mainstream multi-blockchain thesis is foolish; multiple blockchains reintroduce multiple sets of books, the very problem that blockchain was meant to solve; have a single source of truth. Blockchain was the answer to the issue of fooling people into believing a copy was authentic. 

To truly realise the potential of blockchain, it is necessary to use a single shared blockchain with unlimited scale, or the blockchain experiment will have a much less likely chance to be viable.