Triple Entry Accounting

Double Entry accounting

Modern financial accounting is based on a double-entry bookkeeping system. 
Described simply, double-entry bookkeeping allows firms to maintain records that reflect what the firm owns and owes and also what the firm has earned and spent over any given period of time. Double-entry bookkeeping revolutionized the field of financial accounting during the Renaissance period. Whereas simple ledgers had long been the standard for record keeping for merchants, the church and state treasuries, the growth of long distance trade and creation of the first joint stock companies resulted in firms whose records were too voluminous and complicated to provide any assurance of accuracy to their users.

Triple Entry Accounting (Double-entry + Cryptography)
Triple entry accounting is an enhancement to the traditional double-entry system in which all accounting entries involving outside parties are cryptographically sealed by a third entry. These include purchases of inventory and supplies, sales, tax and utility payments and other expenses. Placed side by side, the bookkeeping entries of both parties to a given transaction are congruent. A seller books a debit to account for cash received, while a buyer books a credit for cash spent in the same transaction, but in separate sets of accounting records. This is where the blockchain comes in: rather than these entries occurring separately in independent sets of books, they occur in the form of a transfer between wallet addresses in the same distributed, public ledger, creating an interlocking system of enduring accounting records. Since the entries are distributed and cryptographically sealed, falsifying them in a credible way or destroying them to conceal activity is practically impossible.

Source and further reading: Triple-Entry Bookkeeping, Bitcoin Magazine 

Triple-Entry Accounting Features:

- Tamper-Proof Record

- Permissioned Distributed Ledger - blockchain

- Double-Entry+Cryptography

- Validated, Secure & Private

- Digital Signed Receipts

In practice, for a UK solution, it is envisaged that two or more of the UK's Big Four accounting & audit practice firms would be the validators on a permissioned distributed ledger used to process and record triple entry accounting records and provide trusted real-time auditing and "Proof of Transaction."

See also:

Deloitte, Libra, Accenture: The work of auditors in the age of Bitcoin 2.0 technology

Origins:
The term "Triple Entry Accounting," was first used by Ian Grigg, financial cryptographer, and described in his paper published in 2005, three years before the emergence of Bitcoin and its underlying Blockchain protocol. 

An extract from an excellent article on Triple Entry Accounting by Dug Campbell:

"Whilst double-entry bookkeeping has been the foundation of corporate accounting for centuries, Bitcoin – or more accurately the blockchain itself – now provides a way to introduce an even more powerful method that has been discussed for a number of years – triple-entry bookkeeping. The simplest explanation here is (inevitably!) found on another of Richard Gendall Brown’s excellent recent posts. However, for those of you who want my summary rather than his (far clearer) explanation, here goes:-

• Let’s imagine Company A buys goods from Company B. In today’s world, that means:-
  • Company A will change its accounts accordingly – by recording the cash going out/goods going in.
  • Company B will change its accounts accordingly – by recording the goods going out/cash going in.
• But what if the record of that transaction also gets recorded by a third party?
• Third party = the blockchain, which verifies (cryptographically seals) each transaction and issues a receipt.

Result: every transaction would have a corresponding entry on the books of the other that would have to be verified by the blockchain. Now every transaction is effectively recorded in three places."