The WebLedger era has arrived


This website is all about migration from manually operated, standalone accounting, into the future of internet based accounting, wherever that may take us. 

The world's best business software modules are provided, today, by BSPs (Business Services Providers) on the internet.  These websites provide functionality that is objectively superior to standalone small business software, because they enable small business to send and receive orders, invoices, and payments, pay bills, payroll, etc. over the internet rather than physical printing and mail.

Today these providers are best of breed -- but most of the very best BSPs are not integrated. They do not connect with each other and accordingly, cannot represent a coherent solution for most small businesses.  But when they are interconnected, these are unquestionably, the future basic infrastructure for selling, purchasing, and generally conducting business over the internet.

1.  Physical and logistical cost savings

28 million small businesses in the US alone, are today printing, mailing, and filing paper documents, driving to post office and bank.  The cost savings sending and receiving the transactions over  internet will save $Billions in physical handling, transportation and logistics costs.  

2.  Labor cost savings

Labor is saved by importing "List" items: the customer and vendor record, inventory item details (catalogs), charts of accounts, employees, and numerous smaller lists. Labor is saved whenever a buying/selling transaction is transmitted electronically between trading partners on internet -- already, the predominant pattern is that one of the two parties gets a "free ride" because the data entry by their trading partner is re-used. Since those original entries are increasingly automated within the first system deep in the supply chain, virtually all data entry is being eliminated.
The beginnings of automatic reconciliation are appearing. i.e. the customer's payable will equal your  receivables. Your Cash balance will equal the bank's.  Your loan payable will equal the lender's books.  I have estimated the labor savings at 5 million man-years/year, approximately $150 billion per year; review these calculations and form your own judgment.

The emerging reality is that you will not need a highly-refined GUI from Intuit, running on a Windows 2000 platform because you just won't be spending that level of time in the details of the accounts.

So, small businesses are finding features impossible to find even in midrange software costing $5 figures. This is happening quite easily and naturally by enrolling in a few different iBSP's. All the shrinkwrap from Quickbooks up thru the ERP accounting software, will evidently be swept aside by this coming change.  The finest software available anywhere, for any price, will be to subscribe to a few of these BSPs integrated with a webledger.

You will use more than one BSP.  Everybody will try to streamline their accounting processes but inevitably, will still require a Profit and Loss statement, Balance Sheet, and cash controls.  Some businesses will subscribe to monolithic webledgers from Intuit, MS, and AOL.  But a whole industry of core webledgers is also emerging that will support all of  these multiple, heterogeneous services BSPs by maintaining core general ledger functionality for multiple iBSPs.

Nobody knows what that will look like. But webledger vendors like BizTone are building high-end consolidating/multicurrency accounting databases. Other vendors like NetLedger have built back- end connections between their GLs and specific business allies like ADP payroll.  Several of these leading WebGLs are implementing standard, open XML interfaces to interoperate with the whole wide world.  This is completely different from the lock-in character of today's leading consumer accounting packages.

At this point in January 2001 I have identified some common denominators, the broad alternative architectures thru which webledgers will emerge to support tomorrows business infrastructure on the business service providers (iBSPs). 

TB 1/28/2001         

Note: I post on alt.accounting and other websites daily.   Two-way dialogue is better than one-way broadcasting.  If you're interested, read my posts with this Deja News Query       ...........and post your own ideas and comments!