When people talk about the term “Blockchain” today, they tend to associate it with Bitcoin (BTC), along with its wild and volatile nature. What many do not see is that Blockchain is essentially the cryptographic technology that powers it. BTC is traded through a Permissionless or Public Blockchain, an open environment that is decentralized and is transacted from peer-to-peer using a specific cryptocurrency.
With the rapid development of the Blockchain and cryptographic systems, another area of Blockchain that has been explored is the Smart Contract, where the same technology can be used in a Permissioned environment working with decentralized nodes. For example, consider the procurement to payment process. Buyers and suppliers exchange many standard documents such as Purchase Orders, Delivery Orders, and Invoices, so how exactly could Blockchain be applied to this process?
Conventionally, procurement starts with a buyer generating a Purchase Order (PO) from their own system which is sent to a supplier’s fax or email. The supplier enters the PO into their system, prepares the goods for delivery, and issues a Delivery Order (DO). Once the goods are delivered, the buyer validates the DO, and the supplier then follows up with an invoice. The buyer will cross check the invoice with the PO and DO again, in typical practice.
In each step of this transaction, both the buyer and supplier must allocate manpower to manually transfer the documents into their own systems. Buyers do not provide suppliers access to their systems and vice versa, hence the varying formats. Changing a system is time consuming, difficult, and usually a last resort. However, could there be a way to avoid all the duplication and inefficiencies?
The solution to this problem is not distant — it's here. Doxa has built an enterprise-grade system, Doxa Connex, that can interface with an existing company’s system through an ETL (Extract, Transform and Load) layer or through APIs (Application Programming Interfaces). With our platform, a buyer can initiate a Purchase Request (PR), and the platform will channel it to the relevant department for approval, which starts the Audit Trail.
Upon approval, a PO is issued and sent to the supplier, who will use the same platform to access, accept, and deliver the PO, with each sequence having its own trigger point. The supplier will issue an Invoice, which is posted to the buyer through the platform’s 3-way matching of Invoice, PO and Goods Received. From the PR to Invoice, the platform will match, reconcile, and lock the data into Blockchain as a Proof of Truth, making it immutable (uneditable). This is one method of preventing both unintended or intended errors, enhancing security and resolving potential multi-financing.
Today's challenges of invoice reconciliation, manual processing and rework on data-entry errors make managing the business supply chain/procurement painful. We can help make it easy. Speak to us today.