OCTERA CASE & BLOCKCHAIN FOR ACCOUNTING
For non-technical individuals, blockchain might sound like a piece of complex technology and can be applied across many industries (http://bit.ly/whatis-blockchain). However, Blockchain simply itself can be seen as a technology based on accountancy. It records and stores assets, liabilities, transactions, and provides methods of recording cash flow and reconciling accounts.
- CAN BLOCKCHAIN MAKE ACCOUNTING GREAT AGAIN?
Accountants are the most meticulous, patient, trustworthy people of a business. The accounting process involves manual, labour intensive tasks that are far from being automated. For accountants, a small mistake can cause chaos, while fraud is common and destructive. Globally, external transactions rely on complex and expensive auditing.
How can blockchain step in and help different members of the economy better navigate their trillions of transactions every day? How can blockchain make accountants love their job again?
2. THE ISSUES OF TRADITIONAL ACCOUNTING
In short, there are three main issues:
- Trust between parties
- Revenue collection issues
- Complex and expensive audit processes
Digitalization of the accounting system is still in its infancy compared to other industries, some of which have been massively disrupted by the advances of technology. Some of the reasons may be found in the exceptionally high regulatory requirements in respect to validity and integrity.
The entire accounting system is built, such that forgery is impossible or at least very costly. To achieve this it relies on mutual control mechanisms, checks and balances.
This inevitably affects every day’s operations. Among other things there are systematic duplication of efforts, extensive documentations and periodical controls. Most of them are manual, labour intensive tasks and far from being automated. To date, that seemed to be the sacrifice of revealing the truth.
3. WHY BLOCKCHAIN IN ACCOUNTING REPRESENT THE TRUE NATURE OF BLOCKCHAIN?
Blockchain itself can be seen as a technology based on accountancy. It records and stores assets, liabilities, transactions, and provides methods of recording cash flow and reconciling accounts.
Modern financial accounting is based on a double entry system. Double entry bookkeeping revolutionized the field of financial accounting during the Renaissance period; it solved the problem of managers knowing whether they could trust their own books. However, to gain the trust of outsiders, independent public auditors also verify the company’s financial information.1
Each audit is a costly exercise, binding the company’s accountants for long time periods.
Because blockchain provides an immutable and transparent record of all accountancy-based data, it offers an opportunity for accountants and CPA firms to streamline their processes and audits, while ensuring that the records are accurate and truthful. This is an amazing improvement over traditional accountancy procedures that can be fraught with errors and fraud.
4. ADVANTAGES OF BLOCKCHAIN TECHNOLOGY IN ACCOUNTING
🔸Reducing Human Errors : blockchain in accounting make almost negligible errors. Once data is in the chain, smart contracts will make many accounting functions automatic.
🔸Increasing Efficiency : Blockchain is fast and powerful database. Using blockchain, getting data into and out of the system can be done more efficiently than interacting with legacy accounting software applications.
🔸Reduces Cost : Blockchain will lead to increased efficiency and reduction in errors which will eventually lead towards cost reduction. Following initial adoption cost, accounting firms can expect to see rapid cost savings over conventional accounting systems.
🔸Reduces Fraud : The immutable nature of blockchain makes it extremely difficult to perpetrate and difficult to manipulate. In order to modify a record, the same change would have to be made on all copies of the distributed ledger at the same time, which is highly infeasible.
🔸Reduces Time : One key feature of blockchain that accountants should be excited about is its ability to reduce audit time. With the use of smart contracts, many auditing functions can be automated which will reduce the time, an auditor needs to look after the records. The inherent traceability built into blockchain makes auditing fast and easy.
4. EARLY USE CASES OF BLOCKCHAIN IN ACCOUNTING
- Ernst & Young: In April 2018, E&Y launched “Blockchain Analyzer” that will facilitate EY audit teams review and analysis of transactions on the blockchain.
- KPMG: launched “Digital Ledger Services” program in 2016 to help financial services companies investigate blockchain applications.
- PwC: they release blockchain auditing service with crypto businesses already signed up. The service audits company blockchain services, ensuring they’re using the technology correctly and effectively.
- Deloitte: has been playing the blockchain game all the way back from 2014 when they launched Rubix, billed as a “one-stop blockchain software platform.”
5. OCTERA x YELLOWBLOCKS
We belive in the B2B solutions and the longterm commitment for Vietnam 🇻🇳deeptech ecosystem.
Clifford and his team at Octera Technologies have been tackling accounting challenges with
tech since 2014. In 2017, he partnered up with fintech researcher Leonard Cucos who had led
engineering teams of Nokia and Siemens across the world. Together, the company revamped
their existing solutions with blockchain, and OCTERA CIBBS© (Complete Integrated Blockchain
Business Solution) was born. Today it is the first real-world accounting and business framework
powered by distributed ledger and artificial intelligence.
In 2018, Octera Technologies opened office in Vietnam. An entrepreneur himself, Clifford felt a
strong connection to the entrepreneurial spirit of the Vietnamese. He knew this was where he
and his team could make an impact. And he is ready to commit. He consistently showed up at
business and tech events across the country. Just a week ago, he was found taking notes at
Ministry of Justice’s workshop “Law And The Fourth Industrial Revolution Workshop”, where
YellowBlocks’s CEO Kimiko Doan also spoke.
👉Read the Octera’s white paper to know more:
https://octera.io/docs/OCTERA%20CIBBS©%20Whitepaper%20EN.pdf
A content curation by YellowBlocks
Sources: Octera.io, Entrepreneur.com, Cointelegraph.com, Wsj.com, Deloitte.com, Forbes.com
About YellowBlocks
Established in 2018, YellowBlocks is the first emerging tech ecosystem connector and consulting firm for Vietnam and the world. We have more than 100 partners and 80 advisors globally, with an extended reach of 100,000+ audience in the tech/ startup space.
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