The Efficiency of Single Truth: Triple-entry Accounting

84 Pages Posted: 18 Feb 2021

See all articles by Juan Ignacio Ibañez

Juan Ignacio Ibañez

UCL Centre for Blockchain Technologies; The DLT Science Foundation

Dr. Chris N. Bayer

Development International e.V.

Paolo Tasca

UCL Centre for Blockchain Technologies

Jiahua Xu

University College London - Department of Computer Science; The DLT Science Foundation; École Polytechnique Fédérale de Lausanne; UCL

Date Written: January 20, 2021

Abstract

We conduct a gap analysis to identify shortcomings in current accounting systems, juxtaposing the application of blockchain-inspired triple-entry accounting (TEA). The application of TEA remediates a number of issues or “pain points” in the accounting domain, from multi-party logistic nightmares and billing inefficiencies to “creative accounting.” An inventory of current practice further reveals that, although not intended to serve as an ultimate accounting tool in most cases, DLT has been used to develop a quasi or full TEA application in many separate instances. DLT developers are, with innovative TEA applications, breaking new ground in the accounting world, especially in the logistics and supply chains sectors. Anecdotal evidence suggests that the efficiency effects may well surpass the primary DLT-based TEA input costs, in particular given the addition of single truth: a common, shared ledger with IoT oracles between parties potentiates an agreed understanding of the facts. A TEA system thus reduces friction between parties, and thus lowers costs related to reconciliation and risk management.

Keywords: triple-entry accounting, distributed ledger technology, blockchain, single truth

Suggested Citation

Ibañez, Juan Ignacio and Bayer, Dr. Chris N. and Tasca, Paolo and Xu, Jiahua, The Efficiency of Single Truth: Triple-entry Accounting (January 20, 2021). Available at SSRN: https://ssrn.com/abstract=3770034 or http://dx.doi.org/10.2139/ssrn.3770034

Juan Ignacio Ibañez (Contact Author)

UCL Centre for Blockchain Technologies ( email )

UCL CBT UCL Computer Science
Malet Place London WC
London, London WC1E 6BT
United Kingdom

The DLT Science Foundation ( email )

United Kingdom

Dr. Chris N. Bayer

Development International e.V. ( email )

Germany

HOME PAGE: http://https://www.developmentinternational.org/

Paolo Tasca

UCL Centre for Blockchain Technologies ( email )

Gower Street
London, WC1E 6BT
United Kingdom

HOME PAGE: http://paolotasca.com

Jiahua Xu

University College London - Department of Computer Science ( email )

London
United Kingdom

The DLT Science Foundation ( email )

London
United Kingdom

École Polytechnique Fédérale de Lausanne ( email )

Quartier UNIL-Dorigny, Bâtiment Extranef, # 211
40, Bd du Pont-d'Arve
CH-1015 Lausanne, CH-6900
Switzerland

UCL ( email )

UCL Computer Science
Malet Place London WC
London, London
United Kingdom

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