Change is coming.
Payment forms have evolved from the barter system to precious metal coins to paper currency to paper checks to electronic transfers to digital currencies. The right to receive the payment automatically by an agreed upon method on digitally providing the proof of work is ripe for change as well.
Fuelled by blockchain technology, change is coming in the form of smart contracts.
What is a smart contract?Smart Contract is a programmed contract or agreement that can be trusted to provide predetermined outcomes autonomously, securely, and speedily to a workflow (transaction).
What will change?
Timesheet submissions, work logs, time spent on a file/account will be part of the blockchain.
Think about an Attorney or an Accountant billing their Clients. As part of the blockchain, the work log will be immutable. It will be preserved into the blockchain for posterity and audit. Having immutable data will help in fraud prevention and will overall reduce friction.
The blockchain will invoice based on the contract. Clients will have transparency in billing and access to their draft invoice in real time.
The providers on the other hand will benefit from automating their invoicing for a more manageable account receivables (AR).
Even the utilization rate will go up.
Expense reports or individual expenses that are to be billed will be made part of the blockchain as well. Another set of records (data) will stay with the agreement (Contract).
Who will use it?
Law Firms- According to a 2018 Clio Legal Trends report, the average lawyer dedicates only 2.4 hours to billable work per day despite working 50 hours per week. Law firms can cut down on excessive manual labor and accelerate legal proceedings with the use of smart contracts. Use cases for smart contracts in the legal industry typically are applications in which contracts are narrow, objective, and mechanical with straight-forward and clearly defined outcomes. Some examples include Intellectual Property Rights, Property Rights, Chain of Custody, and Notarization.
Accounting Firms – Accounting firms and finance departments are also likely to adopt smart contracts as it will increase speed and efficiency as well as reduce costs. The receivable turnover time can be reduced from an average of 45 days to 15 days. The ability to offer smart contracts is therefore likely to become a leverage factor in negotiations as per the Journal of Accountancy.