One a legit business can’t live without
The development of blockchain technology and smart contracts digitized what has been the traditional financial culture of recording every money movement via receipts such as sales receipts, bank statements, invoices, credit vouchers, and a replacement order. Whatever the case, money movement is documented and recorded in an attestation ledger.
An attestation ledger is no other than an account book purported to provide evidence of transpired transactions. Individual transactions are financial transactions that need to be recorded even by simple accounting.
The general ledger of any company is not the attestation ledger though, but a special ledger tied to a single account. The single account may be a bank account or an eCommerce account, like PayPal or a digital crypto wallet. A cashbook or a separate ledger is to be prepared for each account, which is in this case, an attestation ledger. It is vital that to every financial transaction, there must be assigned one document. Transfers, and other such paperless money movements, are designated one attestation ledger according to their purpose.
Attestation Ledger Purposes
As the name implies, the ledger attests to the authenticity of a performed transaction. It acts as legal proof of every financial transaction that exists within a business. Any accounting department that assigns documents to every movement of money executes proper management. This legal proof is mandatory for tax declaration assignment which is needed to give the taxation office a sustainable proof of the accuracy of a tax return. As such, it is mandatory and required for all commercial and business enterprises.
Traditionally, some small business owners may get exemptions including some special freelance work done. Business transactions that are lacking in proper attestations may call the attention of the tax office and an investigation may probably be launched. Worse, it can lead to consequences that may prove to be economically detrimental to the brick-and-mortar business.
For every legit business, attestation ledgers are imperative as it is a reliable form of a distributed ledger providing a concrete record of transactions involving commitments, agreements, deals, and statements. It can be an application showing ongoing transactions on a genuine ledger tool.
For a distributed ledger technology, it consists of all types of records running on a blockchain-based worldwide network that is updated individually and independently by every participating computer or node. P2Ps (peer-to-peer) require an attestation ledger to simultaneously record the exchange and transfer of assets in multiple places.