It is important for ecommerce architects to realize how empowering a webledger is. Any webledger is potentially a bank. 

A bank is just a general ledger, with security, and a 19th century interface. Clerks who stand all day behind counters, rubberstamping things.

A webledger becomes a substitute for banks, when it provides settlement services. This can be achieved by the simple mechanism of allowing their subscribers to send and receive transactions to each other at no cost. How much does a SQL query cost a webledger host? Nothing.

3rd parties would establish businesses to buy and sell receivables and payables from other subscribers on the host (this would be assisted of course, if there were some measures to establish creditworthiness of subscribers, strong authentication /nonrepudiation on the webledger, etc.) Here is some research http://www.smu.edu/~jwinn/catalytic.htm

Here are some examples of commercial webledgers:

NetLedger http://www.netledger.com 
BizTone http://www.biztone.com/ 
IntAcct http://www.intacct.com/ 
eLedger http://www.eledger.com/ 
BAPort http://www.baport.com 
ePeachtree http://www.epeachtree.com 
BizFinity http://www.bizfinity.com/accfinity.cfm 
NetVeil http://www.netveil.com/ 
SecuredBooks http://www.securedbooks.com/ 
IndiaLedger http://www.indialedger.com 
NewLedger http://www.newledger.com/ 

etc etc.

Bear in mind, none of these webledger vendors support their subscribers to submit any transaction to each other thru the host. They are all aware, on some level, of the implications.

Any technology that enables Biztone or NetLedger customers, for example, to actually make a secure multicompany journal entry with unrelated 3rd parties who are customers of their general ledger provider, will result in an immediate and vigorous competition between settlements providers, who would setup shop by subscribing for a Biztone or NetLedger account. 

Settlements would be no big deal. Providers need not be banks. They may need read-only access to your general ledger to review creditworthiness, but not necessarily. Here is how it works: I buy a product from AnySupplier, incurring an debt to AnySupplier. AnySupplier could be any physical or online vendor.

To pay the debt, I form an intercompany transaction to eliminate it from my Payables, and creating an Account Payable in my ledger to my favorite settlements provider inside the host, Sarah's Factoring Service. Just like any other multicompany accounting system, I create a Journal Entry for Sarah's books: an account payable to AnySupplier and an account receivable from me. 

The host enforces transactioning, that my payable and Sarah's receivable from me, are both posted.  After I created this proposed intercompany transaction, it went to Sarah's unposted journal batch.  When she accepted it, she accepted a receivable from me, and a payable to AnyCompany.  I now have a payable to Sarah's. 

I'm out of the loop. Sarah's is located in Bermuda; she accumulates gobs of payables and receivables, and lives off the float, paying only net remittances in large aggregates never earlier than due dates <grin> Of course, I must pay Sarah's some net amount, or receive some net amount, lets say, at end of month. 

Privacy of this affair is fairly decent. None of my payments or receipts, ever leaves the security or privacy of the webledger host. My dealings are commingled with countless thousands of other consumer/business transactions flowing in and out of this host.

When necessary, audit trail will rock. Transactions are practically impossible to forge on the big commercial webledgers. Creditworthiness is established by objective queries run by the host, into your transaction history, which provide objective metrics without revealing personal data. The costs and manual processes of GAAP financial statements are unnecessary. 

There are many, many, many, many, other services that would become possible if the right kinds of secure, server-based intercompany accounting transactions are supported on these systems. How about securities trading services? Personnel, payroll, HR and staffing? All these are enabled by an Intercompany Journal Entry. Millions of accountants already understand the whole semantics of intercompany journal entries. There is a solution for every diverse kind of transaction, in double-entry accounting. This requires no training, no change in business culture.

At some point, the webledger vendors need to provide Intercompany Journal Entries to other, competing webledger hosts. 

G/L Gateway companies will anyways, jump into this, totally focused and specialized on connecting the various Web GLs. They will maintain a BizTone account, a NetLedger account, mySAP account, an Oracle BOL account, EDI Gateways, yeah and even a Quicken.com account, mySAP account, Ariba account. They will transport a transaction from one world to the other world, for competitive rates. 

Any good gateway arb will have plenty of technology connecting their subscription locations and analyzing data. And can you *imagine* what this will lead to? Gateway arbs will exploit pricing differences in these closed universes. Pricing spreads will be largest in credit, payments, payables and receivables. There will also be spreads in products and services within the hosts. XML semantics are getting increasingly granular and exact, within vertical markets and B2B trading hubs....

 
 
* Todd F. Boyle CPA    http://www.GLDialtone.com/
* International Accounting Services LLC    tboyle@rosehill.net
* 9745-128th Av NE, Kirkland WA 98033      (425) 827-3107
* Accounting ASPs, XML, Web ledgers, web GLs, BSPs, whatever.