The Creation of One Truth: Single-Ledger Entries for Multiple Stakeholders Using Blockchain Technology to Address the Reconciliation Problem

Abstract

Blockchain technology has evolved beyond its original uses as a methodology to record cryptocurrency transactions to support various business applications. Over the past few years, it has gained increased attention in the accounting profession. The current paper proposes a new conceptual framework to implement and apply blockchain technology in the accounting profession that is based on a single-ledger model. The paper addresses the reconciliation problem if more than one party is involved in a transaction. It defines the requirements to have an accounting system without reconciliation challenges. Following the paper approach, transaction details are recorded on the blockchain ledger before inserting the transaction details in the transacting parties’ ERP systems. This ledger is a single point of truth that can be viewed directly without the need for creating information silos in the ERP systems of transacting parties, hence addressing the reconciliation challenge. The presented framework creates one truth for all parties involved in a transaction eliminating much of the redundancy involved in current accounting systems.