How to Choose a Blockchain Accounting Solution

The world of accounting is changing rapidly, and blockchain accounting solutions are at the forefront of this change. With the ability to track and record transactions securely and transparently, blockchain-based accounting solutions are quickly gaining traction with businesses of all sizes.

A recent VentureBeat article, for instance, notes that “one startup, Bulla Network, is even using blockchain for the entire invoicing, payroll and accounting process.” Even big players like Xero are showing interest in blockchain. But with so many options on the market, how do you choose the right one for your business?

Several factors should be considered when evaluating blockchain accounting solutions, including control and composability, security, cost, and ease of use. Let's take a closer look at each of these factors.

Control and composability

One of the key benefits of blockchain-based accounting solutions is that they give you more control over your financial data. With traditional accounting solutions, your data is stored centrally on servers that are managed by the provider. This means that if the provider goes out of business or suffers a data breach, your data could be lost or compromised.

With a blockchain-based solution, your data is stored on a decentralized network of computers, which makes it much more resistant to security threats. In addition, you have the ability to grant or revoke access to your data as you see fit, which gives you more control over who can view and use it.

That said, not all blockchain accounting solutions are created equal. For example, to process crypto payroll or create an NFT invoice with Bulla Network, users don't need to create an account or download any software. They simply connect their crypto wallets and start using the platform. This not only makes it more convenient for users, but it also gives them complete control over their data.

Other platforms, like Request Network, require users to create an account. This limits composability because it means that users need to trust the platform to store and manage their data.

Security

When it comes to financial data, security is paramount. Blockchain-based accounting solutions offer a number of security advantages over traditional solutions. First, as we mentioned earlier, they're decentralized, which makes them much more resistant to hacks and data breaches.

In addition, most blockchain accounting solutions use advanced encryption technologies to protect user data. And because they're built on smart contracts, they can automate many of the manual processes that are prone to errors and fraud.

If it feels like cybersecurity is constantly in the news, it's because it is. Recent research shows that dangerous malware is up 86%. The consequences of a breach aren't just the obvious first-order effects, like the cost of a ransom or the theft of customer data. There's also the potential for long-term damage to your reputation and brand. When a customer's trust is violated, it takes a long time to earn it back.

The loss of a customer's trust also translates into a loss of revenue. A customer who loses trust won't recommend your products or services to others, and they may even switch to a competitor. In a recent study, 83% of customers said they would take their business elsewhere after a data breach.

Cost

Another factor to consider when choosing a blockchain accounting solution is cost. Many traditional accounting solutions charge monthly or annual fees, while some newer cloud-based options charge per transaction or month.

In today's highly volatile macroeconomic environment, with persistently high inflation, rising interest rates, market uncertainty, and the potential for a global recession, businesses need to be more cost-conscious than ever. They need to focus on their bottom line and look for ways to reduce costs.

Some businesses choose to put human resources on the chopping block to save money, but this is often a short-sighted decision. With the right technology in place, businesses can automate many of the manual tasks that eat up time and money.

This is where blockchain accounting solutions can help. By automating time-consuming tasks like invoicing, payments, and reconciliation, they can help businesses save money and free up time to focus on more important things.

Ease of use

Finally, you'll want to consider how easy the solution is to use. After all, if it's too complicated or time-consuming, you're less likely to use it consistently. Look for a solution that offers a user-friendly interface and robust documentation so you can get up and running quickly.

The modern business can't afford to lose man-hours getting lost in the weeds of complex software. They need solutions that are easy to use and can be quickly learned by employees.

This frees up time for businesses to focus on their core competencies and leaves them with a leaner, meaner, more agile operation.

Making the decision

When it comes to choosing a blockchain accounting solution for your business, there's no one-size-fits-all answer. The right solution for your business will depend on your specific needs and preferences. However, by considering the factors we've outlined above, you can narrow down your options and make an informed decision about which platform is best for your business.