Blockchain triple entry accounting provides a secure and accurate way of recording financial transactions, and this could make it easier to obtain bridging finance, says a Data-Economy.com article from September 2017. Blockchain accountancy uses technology that was developed for the online currency Bitcoin. All interested parties, such as banks, accountants and traders, can write information into a record of financial transactions. No one person or organisation controls the recordkeeping, and once a record has been made, it cannot be tampered with or deleted. Double entry accounting is a system used by many companies, but blockchain accountancy adds a third process. Once an invoice or order is logged, it is fixed and cryptographically sealed and verified using a third entry. The system cuts down the time it takes to audit financial accounts, and this could reduce the cost of auditing. Blockchain auditing does not completely eliminate fraud, but any person wanting to defraud the system will leave a trail that should make the fraud easier to detect. The form of auditing used means that when a business that uses the system applies for a bridging loan, the lender knows that all the financial records of the business are accurate. This will make it easier for lenders assess the financial health of a business. Many financial business deals rely on trust, and a bridging loan lender trusts that the borrower will repay the loan. Blockchain accounting is not yet widely adopted, but it could make it easier for businesses to prove their trustworthiness.
May 10, 2022
