Impact of Blockchain Technology for Business and Information Systems: Automation of Inter-Company Debt Compensation Case Study

Abstract

Debt compensation is a process via which various entities (companies, people, etc.) propose the payment of their mutual debts by compensating them according to the credits they may have in their favor. The aim is to establish the financial information of a company so that its debts can somehow be satisfied by its credits, breaking the vicious cycle of debts that cannot be paid. To this end, this financial information is retrieved from the business information system of a company, encompassing how much is owed and to which companies. From the retrieved information, this paper describes the implementation of an automatic system that allows calculating not only the debt cycles involving different companies, but also how these cycles can be effectively solved using blockchain technology thanks to the use of smart contracts. Blockchain technology can have a great impact for companies in this kind of application, guaranteeing the security and traceability of transactions among companies, which are two well-appreciated features from a financial auditing point of view.