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Critical Role Of Crypto Subledger

Reduces Human Errors, Streamlines Accounting Process
CHAN WEI XIANG
BY CHAN WEI XIANG


In the dynamic landscape of crypto accounting, managing a large volume of integrations, transactions, and tokens can quickly become overwhelming. Each integration involves diverse platforms, varying formats, and different standards, making data transfer and synchronisation a time-consuming and error-prone process. The sheer number of these integrations requires careful monitoring and regular updates, increasing the risk of discrepancies that can cascade through financial records.

MITIGATING ERRORS THROUGH AUTOMATION

The complexity of handling numerous high-speed transactions across multiple exchanges and the diversity of tokens involved further complicates the accounting process. Manually reconciling these transactions introduces a significant risk of human error, leading to potential discrepancies in financial statements and compliance issues. A dedicated crypto subledger is essential for automating these processes as it reduces errors, and ensures accurate, up-to-date financial reporting, thereby maintaining the integrity and reliability of the financial data.

After looking through many crypto subledgers and being part of the sales process, I have come up with a checklist to help finance leaders with crypto holdings make a more informed decision.

Crypto subledger checklist:

  • Crypto integration features: This refers to adding of your blockchain data, such as wallet addresses, custodian accounts or smart contract addresses, into the system
  • Finance usage features: This refers to usage of the system by the finance team
  • Export features: This refers to exporting of the data to other accounting systems
  • Financial reporting features: This refers to accounting standards-required features
  • General features: This refers to other features not listed above.

Here are the questions to ask regarding the features of the subledger checklist:

Crypto integration

  1. Does my crypto subledger add new integration quickly?
  2. Does my crypto subledger cover all my integration?
  3. Does my crypto subledger allow manual upload of data?
  4. Does my crypto subledger filter spam tokens easily?

Finance usage features

  1. Does my crypto subledger allow me to amend data easily via UI by adding manual entries?
  2. Does my crypto subledger allow crypto transactions to be classified automatically and reconciled simply?
  3. Does my crypto subledger generate fair value entries automatically?
  4. Does my crypto subledger support my native language?

Export features

  1. Does my crypto subledger integrate with my existing accounting system easily?
  2. Does my crypto subledger allow me to create and customise a full chart of accounts?
  3. Does my crypto subledger provide required reports (Financial Reporting, Management Accounting, Treasury Analysis etc)?
  4. Does my crypto subledger have fast data load times and report generation speed?

Financial reporting features

  1. Does my crypto subledger support my pricing source?
  2. Does my crypto subledger support my crypto cost methodology?
  3. Does my crypto subledger update itself with the latest accounting/industry standards?
  4. Does my crypto subledger have error detection/reconciliation capability?

General features

  1. Does my crypto subledger have relevant security certification such as SOC certification and audit trail?
  2. Does my crypto subledger provide timely technical support?
  3. Does my crypto subledger fit within my company’s budget?
  4. Does my crypto subledger support multiple users?
  5. Does my crypto subledger have AI features such as chatGPT features or automatically classifying transactions?

CONCLUSION

A crypto subledger is an indispensable tool in modern crypto accounting. Managing multiple integrations, high-speed transactions, and diverse tokens on traditional spreadsheets is error-prone and inefficient. A crypto subledger automates these processes, significantly reducing the risk of human error and ensuring accurate and timely financial reporting.

The above checklist is a valuable resource for finance leaders to assess and choose a crypto subledger that aligns with their specific needs. By focusing on key features like integration, finance usage, and reporting, businesses can enhance their accounting practices and maintain the integrity of their financial data in an increasingly complex digital landscape.

Here are a few crypto subledgers that come with free trials. Do check them out:


Chan Wei Xiang, CA (Singapore) is Senior Research Manager, Elven.

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