Traditional businesses are hesitant to adopt cryptocurrencies due to the complexities of managing and integrating cryptocurrency transactions into existing accounting systems.
The integration of digital assets into financial reporting and tax calculations poses significant challenges. Businesses that actively engage in cryptocurrency transactions, such as crypto payments and payouts, face the arduous task of meticulously tracking and accounting for all their cryptocurrency activities.
While blockchain explorers offer transparency by providing a record of all cryptocurrency transactions, this data must be seamlessly integrated into traditional accounting systems, which typically operate with fiat currencies. This discrepancy between on-chain and off-chain currency expressions further complicates financial reporting and tax calculations.
Helping businesses adopt digital assets
Today, businesses can implement specialized crypto accounting tools to simplify their crypto journey. One of the leading solutions today is AEM Journaler, a crypto account software tool provided by AEM Algorithm that can be integrated with traditional accounting systems, including Xero and Intuit QuickBooks.
AEM Journaler allows traditional businesses to easily track their crypto activity and simplify the reporting process. The tool can sync transaction feeds, automate the posting of invoices and bills, and accurately record balances and tax-related entries. It supports dozens of cryptocurrencies from blockchain wallets via live feeds from on-chain, exchanges and custody platforms, including Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT).
Businesses operating with crypto exchanges like Coinbase or Binance can import data for over 20,000 digital assets and any asset listed on CoinMarketCap, CoinGecko and DEX screener, with the system retrieving available exchange rates.
Source: AEM Algorithm
Using AEM Journaler, businesses can automatically import data via live data feeds or in large batches, enabling them to update their financial and tax reports. The system allows the export of transactions and invoices and supports Last-in, first-out (LIFO), First-in, last-out (FILO), and Highest-in, first-out (HIFO) methods and an adjusted cost base (ACB), along with more custom functionalities in development.
AEM Journaler streamlines crypto accounting through its globally certified direct API integration with Xero, Intuit QuickBooks, and CSV exports for other systems. This ensures accurate transaction tracking and reconciliation, efficient tax liability calculation, and simultaneous tax reporting for instant updates to gains, losses, and asset holdings. The next upgrade will bring AEM Journaler closer to becoming almost a stand-alone crypto package, with the ability to issue invoices and track settlements automatically.
Source: AEM Algorithm
While businesses can use Journaler to import data from a wide range of blockchain and exchange wallets, AEM Algorithm offers a proprietary C2B crypto wallet, AEM+, which is being expanded to support many digital currencies. In the future, the wallet will be used to swap tokens, utilize multisig authorization and export transaction data.
AEM Delta, another prototype of a DeFi wallet module for interacting with decentralized finance (DeFi) protocols, will eventually bring DeFi capabilities to AEM+, helping companies manage both CeFi and DeFi activities. This combination of Journaler and AEM+ offers an innovative solution for accountants working for companies involved in crypto operations.
Source: AEM Algorithm
Jakub Sawczuk, founder and CEO of AEM Algorithm, commented:
“At AEM Algorithm, we’re pioneering the future of crypto accounting by bridging the gap between traditional financial systems and the blockchain era. We aim to empower businesses worldwide with accessible, efficient, and secure solutions for managing crypto assets and push the boundaries to deliver something unique.”
Bridging the gap between Web3 and Web2 accounting
Founded in 2018 at the Blockchain Centre in Melbourne, Australia, AEM Algorithm embarked on a mission to revolutionize cryptocurrency accounting. Collaborative efforts and strategic partnerships, including one with RMIT University, paved the way for AEM’s certification as one of the first fully crypto-enabled accounting apps.
AEM Algorithm secured marketplace certification from Intuit Quickbooks, making it the only app listed in both marketplaces in 2023. Additionally, it expands its tax reporting capabilities and implements machine learning algorithms. The new AI module will enhance data retrieval and automate data export to accounting systems.
Furthermore, AEM Algorithm investigates the potential of launching its decentralized token to support its long-term vision, complement its comprehensive suite of tools and fuel the development of its large decentralized platform.
By bridging the gap between Web3 and Web2 accounting systems, AEM Algorithm helps traditional companies adopt crypto and manage digital assets while complying with regulations. However, the mission is much broader, and AEM Algorithm is constantly expanding its capabilities to become a comprehensive standalone platform for managing accounting and finance in one place, which will be fueled by its upcoming capital raise driven by Cointelegraph Accelerator and Cyberport HK Accelerator programs.
Learn more about AEM AlgorithmDisclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain in this sponsored article, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.
