arapXML: Facilitating Efficient General Ledger Integration

1. Mission Statement: arapXML enables exchange of transactions based on classic double-entry accounting.  It is designed by independent web services providers for basic general ledger integration on the Internet. The purpose and scope of a "General Ledger" most commonly includes financial reporting, tax reporting, and maintaining external balances (cash, and payables and receivables) or control over the subledgers that maintain them. arapXML enables exchange of transactions based on classic double-entry accounting.  It is designed to allow individuals and companies to use software or services from multiple vendors to conduct business.

2. What is arapXML? • an XML format for transferring GL data • primarily for application-to-application integration • A/R and A/P are intrinsic in most A2A integration • arapXML is not primarily for B2B buying/selling • arapXML is suitable for “balance sheet transfers…” • transferring “an asset…” or “a liability” • “charge the inter-company account…”

3. Business goals of arapXML • The five root-ledger requirements (efficient replication of data between systems to enable component business service providers (BSPs), instead of monolithic control by larger software vendors or service providers.) and, • Ending redundant/inconsistent data (enabling the sharing of a single copy of transactions in a shared data repository, accounting system or storage provider.)

4. Five root ledger requirements (these apply to anybody using multiple business applications.) • Financial reporting for GAAP, and for management • Timely and accurate tax reporting • maintaining near-realtime cash balances, cash flow realization dates of all events past & future • consolidated accounts receivable / accounts payablemanagement and settlement (AR/AP) • maintain fiscal control (e.g. control totals) over money and accounts receivable and payable on multiple BSPs If you have two or more systems, you will need a root ledger.

5. Invoice, PO, payment transactions are equivalent to GL rows General Ledger Entry Invoice debit credit sales, widgets $ 100sales, services 40payable, taxes 14 acct.receivable 154 Total 154 154 widget $ 100service 40 Subtotal 140 Tax 14 Total 154 Various transactions, with dissimilar shapes, are knocked into rows in order to analyze, summarize, and consolidate them together.

6. shared file-space marketplacesthe anti-portal • High-logic RDBMSs may be overkill for GLs. • The sysadmin knows everything. • hackers, civil litigants, etc. can, too.Owners want total sovereignty.Transaction sets are just snapshots;can be stored as files.

7. shared file-space marketplacesthe anti-portal • Not Ariba, CommerceOne, eBay. • Not IBM, Sun, Oracle. • Not Microsoft, Netscape/AOL alliance. • No application logic • Less susceptible to massive break-in • Impossible to lock-in. User sovereignty. • Impossible for anybody but the trading partners to see the data! • But impossible to revoke views once you give the encryption key.

8. Example server specificationsin shared storage marketplace schemes • Robust, high performance commercial hosting • Write once, read-only ...cannot be vandalized. • All files globally visible but encrypted • optionally, subdirectories for each participant • initiator assigns expiry date • pay for storage based on size and lease period. • server assigns GUID filenames impossible to guess - but no owner or access permissions. • pay hosts, bandwidth providers, and settlement agents entirely with intercompany JEs.

9. Client software specificationsin shared storage marketplace schemes • Any software capable of composing XML. • Create purchase order, payment etc. locally • Encrypt the transaction and post it publicly. • send encryption key to trading partner • the recipient fetches the document and reads. • the recipient posts acceptance publicly. • optionally, the parties maintain their GL the same way, as encrypted files in the sky. • this "client" application can be hosted just like any other application, or it can be a standalone program like Napster or Quickbooks.

10. Commercial Transaction Patternsusing the General Ledger for Lightweight Business Process or Business Collaboration management • GL transactions at different points in time, related to the same business process. • Examples: Offer-acceptance, Order-fulfillment-settlement • Most facts contained in GL headers/rows (ArapXML schema for general ledger) • More details in XML attachment, if necessary. • Adopt ebXML core components, ebXML business process specification schema.