Triple Entry Accounting

  • For approximately the last 600 or so years, the world has been using double entry accounting to track and reconcile the disposition of assets

  • In double entry accounting,  each party in a transaction has their own view of the truth; they do not share books and massive amounts of resources are spent on auditors and administration

  • In 2005 Ian Grigg published a paper which introduced the idea of triple entry accounting

  • Triple entry accounting seeks to link the books from individual organizations involved in a transaction together by wrapping the entire transaction into an entry that includes a digitally signed receipt of the transaction.  With this approach, each party involved in the transaction shares the same view of the world.

  • Triple Entry Accounting and the BlockChain:

    • Fully automated audits are a true possibility. This could save organizations billions and billions of dollars annually.​

    • Instances of fraud, could be reduced or even eliminated

    • With a blockchain based solution, transactions are recorded and receipts are issued via smart contracts.   Each organization involved in the transaction needs only to record the address of the transaction on the blockchain as a reference pointer.

    • The Transparency feature of open blockchains could increase trust in public entities whose transactions should be completely exposed;  for example, non-profits, governments, (some) religious institutions, etc

    • Private or hybrid blockchain solutions can be used for organizations that don't want to expose parts of their operations with competitors.  For example, a private blockchain could be used for the supply chain accounting such that competitors would not see company-proprietary data/transactions