## 7 BFS Architecture Components
### Key Smart Contracts  
The concept of _smart contracts_ in the BFS system defines the rules generated to enable automation of business and accounting processes, which can be uniquely tailored to each economic entity's needs. These bespoke, diverse digital protocols are designed to facilitate, verify, or enforce contractual or transactional agreements, executing automatically when predefined conditions are met, without the need for intermediaries. They are designed to operate within the BFS ecosystem, ensuring transparent and tamper-proof automation. In the BFS system, smart contract capabilities are utilised to automate rules for executing the following:  
1. Business transactions;
2. Accounting transactions;
3. The accounting cycle. Business Transaction Smart ContractAn economic ecosystem/network consists of heterogeneous economic entities (i.e., businesses or business entities). These entities are interconnected via fundamental units of interaction--business transactions. These interactions represent diverse economic events in the BFS ecosystem that have or will have monetary implications, i.e., they will result in the exchange of digital funds or digital assets at some point. A transaction represents the movement of value (digital funds or digital assets) from BFS wallet addresses to other BFS wallet addresses. To provide a standardised way of executing a diverse and ever-evolving set of economic interactions, the BFS system provides a solution in the way of a framework for business transaction smart contracts. These represent events of an economic nature with monetary implications for the business. According to [9], transactions that are not explicitly completed at the end of the accounting period are considered open [9]. In our architecture, only completed transactions are pushed through the accounting cycle. Accounting Transaction Smart ContractThis represents a novel design for a BFS-specific implementation of a traditional smart contract model. It is a set of pre-defined smart contract rules that govern the transformation of transactional data into accounting data, their classification into respective accounts, and the aggregation of values into corresponding accounting journals (ledgers). Each individual accounting transaction has two sides (debit and credit) that are always balanced [9]. Accounting CycleThis is a critical and fundamental concept in financial management, representing a series of steps undertaken to ensure accurate and comprehensive recording and reporting of an entity's financial activities [9; 43]. Depending on the requirements, the accounting cycle can be described in 4, 5, or even 10 steps. However, the general consensus is that there are eight steps, and this concept is adapted for the BFS system's design and implementation. The process starts with the initial identification, collection, and analysis of business transactions, leading to their recording in journals and posting to the general ledger, etc. It progresses through the preparation of trial balances, adjustments, and the creation of adjusted trial balances, culminating in the preparation of financial statements, their communication, and the closing of the books for the accounting period [43]. The accounting cycle is a comprehensive process employed by businesses to ensure that their business transactions are accurately recorded, processed, and reflected in their financial statements. Our adaptation of the accounting cycle is illustrated in Figure 5. The BFS system's accounting cycle includes the following eight steps:  
1. _Identifying and Analysing Business Transactions._ The financial accounting cycle only recognises transactions that have or will have monetary implications, i.e., those resulting in an exchange of funds at some point [9]. These transactions are collected for processing within the same accounting period, and their impact on the company's finances is assessed. 2. _Activating Accounting Transaction Smart Contracts._ This step involves gathering economic descriptors about business transactions.