Blockchain in Accounting: Climbing the Slope of Enlightenment

A Pragmatic Approach

Simply put, accounting is the most direct use case for blockchain. As many pilots failed to gain mainstream adoption, we entered the Trough of Disillusionment. But we currently find ourselves climbing the Slope of Enlightenment. One of the pioneers is Swedish software company VISMA, with 15,000 employees and EUR 2B in annual revenue. In 2021, VISMA's subsidiary Yuki took a strategic leap: connecting its accounting platform to the public blockchain for invoice authentication, enabling enhanced security and automation. Still going strong as of 2024, this implementation has enabled efficiency in accounting processes and built a foundation for future innovations.

Why Is Blockchain a Good Fit?

VISMA | Yuki and mintBlue developed a means of exchanging complete invoice data peer-to-peer using industry standards like the XML UBL format. Organisations receiving an invoice can retrieve missing data from the blockchain while independently validating authenticity -- a fully automated process. The implementation adheres to FAIR data principles: Findability through public transaction IDs, Accessibility through open standards, Interoperability through an open-source SDK with no vendor lock-in, and Reusability where data can be repurposed for invoice factoring or real-time taxation. Blockchain also enables data ownership where users maintain control of their financial data even if they stop paying for their accounting software, universal multi-party access rights for streamlined auditing, and a tamperproof audit trail that serves as the single source of truth.

• Findability: Invoices discoverable via public transaction ID
• Accessibility: Open, publicly verifiable industry standards
• Interoperability: Open-source SDK, zero vendor lock-in
• Reusability: Composable data for factoring, taxation, and more

How Can Blockchain Innovate in Accounting?

One of the most significant challenges for companies today is sourcing invoices from third parties across different mediums and formats. Without a secure exchange medium, the door is open to fraud and automation possibilities are limited. The solution is a fully digitised version of every invoice, always available globally, with a digital signature by a legal entity for authenticity. With this foundation, governments can track invoice flows continuously for real-time tax payments and digital VAT processing. Auditors can track transactions between companies. Financial institutions can finance invoices in real-time. And social and environmental impact projects can tap directly into trusted bookkeeping.

The end game of blockchain in the accounting sector is the possibility of a 'triple-entry' bookkeeping system, where every credit and debit transaction between multiple companies is interconnected, enabling seamless bookkeeping that can save companies significant overhead. -- Niels van den Bergh, CEO mintBlue

Approaching the Plateau of Productivity

mintBlue challenges the status quo: consolidation into a single chain must happen before more significant adoption can occur. A single global blockchain enables ecosystem actors to trace the full lifecycle of data in a tamperproof manner without trusting an intermediary. The consolidated transaction volume creates an economic security and privacy layer -- it would simply be too expensive to sift through the pool of encrypted transactions. After all, one of the primary drivers for blockchain's invention was how Bernie Madoff ran a Ponzi scheme by maintaining multiple sets of books. Multiple blockchains reintroduce this multiple-books dilemma -- the very problem blockchain was meant to solve.