Regardless of industry, fuzzy financials lack a clear picture view. Inaccurate data records, incorrect numbers, delayed payments, outstanding invoices and other current practices can obfuscate a comprehensive look at a company’s financial health.
Asset-heavy and capital-intensive industries have habitually relied on estimates for services performed and/or materials delivered. This lack of clarity leads to the ubiquitous practice of booking by accruals, can exacerbate heady disputes and reconciliation processes, and adds expensive administrative layers to transactional processes—all scenarios that are tricky to navigate, particularly when margins are razor-thin.
Instead of relying on paper invoices, tickets and manual workflows that result in significant drag to digest granular costs, Data Gumbo smart contracts can provide real-time transactional certainty across commercial relationships. Better financial visibility, in good times or bad, can support more strategic and informed business decisions.
Making Contracts Smarter
Full financial visibility can identify places to capture value, streamline operations and cut costs. To drive these changes, companies are deploying computer-coded protocols to automate the performance of any given contract. This is what is called a smart contract.
Essentially, a smart contract is a codified version of a natural language contract. By identifying data sources, including field operating systems and performance metrics, smart contracts use blockchain technology to generate a verifiable, auditable record that is created in real-time as physical events and services happen. This then triggers automated payments that surface instantaneous visibility into financial transactions, in turn enabling continuous insight into financial spend, health and management.
By ensuring transactional certainty and automating payments based on a neutral, third-party record, smart contracts remove the inefficiencies and fuzziness of financial transactions.
Trust is No Longer Missing
Smart contracts are changing the nature of business relationships. No longer is distrust, siloed information or contrary narratives part of the equation. Transactional certainty from automated smart contracts signals compelling shifts ahead. The financial approach of estimates and accruals is primed to be replaced by real-time, automated and auditable certainty for trust amongst parties.