Enterprise blockchains such as the Linux Foundation’s Hyperledger Fabric can serve as a network layer to track transactions between a company’s branches. Its distributed ledger can form part of an application to record data entries in a transparent way and hold it in a neutral database no party can change easily. Hyperledger Fabric’s tamper-resistant timestamping feature streamlines expensive manual auditing and makes it more difficult to change transaction data once you enter it.
From a practical standpoint, an application that uses a distributed ledger technology can help complex businesses track referrals and commissions. By being able to prove that you’ve forwarded a lead and that your counterpart received it, it builds transparency in an organization, adding to mutual trust and more efficient work. Having the same set of data that no counterpart can change is valuable to complex business networks. Implementing an enterprise-grade application with Hyperledger Fabric blockchain as a timestamping mechanism will improve auditing and help break down data siloing within global business networks.
How commission management currently works
Communication and accounting between a company’s global branches is not always easy or straightforward. Chaos can mount as more members join the network or as transactions increase. Even conglomerates under the same brand struggle to keep track of leads they forward and commissions they collect. To do this manually uses a lot of time and resources to handle, taking focus away from business development. At the moment it’s a given that you need a large finance department to sift through and untangle leads and commission payments.
Aside from being slow and expensive, manual accounting can open transactions to error and abuse. You can imagine a company with global branches that has to forward leads based on geography. Depending on how organized the branch receiving those leads is, they may lose the invoice, delaying payment. Worse yet, they may fail to pay either from poor organization or malice. After all, there is a financial incentive for them to hide behind chaos.
If this situation goes unchecked, it can cripple an organization, introducing all kinds of bad blood between partners. Spending more on compliance and auditing means fewer resources for essential services. Taking time and attention away from the core business means a significant loss of productivity — something no organization wants.
One solution is, of course, a single backend system (pictured above). This, however, would require a single administrator and represents a single point of failure in the system. One actor could change data and it would have to handle the needs of all the actors in the network. An application with a distributed ledger prevents many of these weak points by replicating the data across all the companies running nodes.
Hyperledger fabric blockchain networks for commission management
This is where blockchain technology can step in. A private distributed ledger is an innovative solution that keeps an up-to-date ledger of transactions that each of authorized blockchain participants has access to but not control over. It’s a neutral source of truth – a space to keep a set of records allowing to see the bills you’ve sent and what payments you’ve received. For commissions, it’s clear to see which branch has paid and which has not. Applications with a Hyperledger Fabric layer can greatly simplify such basic functionality (yet very important) as auditing and improve recordkeeping overall.
With the right custom application based on blockchain solution, both cash flow as well as productivity within your organization can be improved. An immutable timestamp is a valuable thing that can keep other branches honest and your accountants happy. Consensus mechanisms in a Hyperledger network enforce rules you and your partners agree on from the beginning. Changing rules or amending records takes a majority of the network to approve. This security builds mutual trust.
For commission management, a Hyperledger layer records referrals and payments, timestamping each exchange and confirming receipt. In the real world, this looks like a dashboard to send and receive transactions as well as audit transaction history. Rather than use an emailed spreadsheet that only a few recipients see, this ledger is open to all the people in the network with permission. Depending on specific needs, this can be everyone or only a few people in the network. On the contrary to the permissionless blockchain network – private blockchain technologies allow to easily grant and revoke permissions.This limited number of nodes and the ability to invite people in or revoke access sets this type of ledger apart from public blockchains like Bitcoin.
Tracking transactions — especially referrals and the commission fees — is a compelling use case for private blockchain technologies such as Hyperledger Fabric-based applications. Immutable auditing simplifies accounting and cuts the need for manual processes. Additionally, it keeps everyone in the network honest by introducing greater transparency into the company’s records.
Building applications on top of a distributed ledger improves cooperation and streamlines some of the most labor-intensive tasks of modern businesses.
For more on how your company can use a private distributed ledger, drop us a line and schedule a free 15-minute consultation. Click here to contact us and one of our experts will get in touch with you.