In theory, keeping control over revenue is simple: customer orders = received payments = revenue in the books. But for companies with large (online) transaction volumes, the reality is more complex. Actuals lends a helping hand for this matching process (and does more than that).

Imagine you’re responsible for the finances of a meal delivery service. You don’t just want to know if all orders are turning into money, but also if that revenue is correctly recorded in the books. Every accountant knows that, in theory, you can manage this using suspense accounts, which are fed by various systems. If those suspense accounts balance out to zero, everything is fine. But every accountant also knows that this is rarely the case, and these accounts often collect a lot of messy discrepancies that require tedious, manual investigation. When you’re dealing with hundreds of thousands of transactions, this becomes nearly impossible. Specialized tools are essential.

A modern approach to revenue completeness

This market opportunity is what Peter Engel saw when he launched Actuals about eight years ago. He and his team created a modern approach to verifying the completeness of revenue. In simple terms, Actuals places a ‘sensor’ on the client’s systems and uses the resulting data to automatically match orders, payments, and revenue. This eliminates the stress of suspense accounts.

Separation of duties

With this technology, strict separation of duties isn’t even necessary—something external auditors typically require but that smaller startups often struggle with. Since Actuals functions as an independent third party, auditors can also rely on it. That alone should make it attractive to accounting firms, but Engel is targeting companies directly. IT departments and Finance & Accounting teams are particularly interested because Actuals doesn’t just connect data from different systems—it also ‘thinks’ in terms of debits and credits. This means the tool doesn’t just provide insights into data across back-end systems—offering the much-desired ‘single source of truth’—but also ensures proper accounting treatment.

The origins of Actuals

Engel came up with the idea for Actuals while working at Deloitte. He saw how traditional auditing methods clashed with the fast-paced nature of startups and scaleups. Initially, he wanted to build a ‘robot accountant’ to tackle the problem. As often happens with startups, the plans evolved over time, and Actuals now primarily serves companies with high transaction volumes that need better control over their accounting processes. Engel now describes his product not just as a “reconciliation engine” but as a “finance data cloud” that provides reliable information from various back-end systems.

The Elliott Scale

At the end of the last century, visionary American accountant Bob Elliott predicted a future where technology would take the lead in processing, generating, and auditing financial information. In the series The Elliott Scale, Nart Wielaard evaluates tools, initiatives, startups, and established players to see how much real innovation is happening in the industry.

AI

The core of what Actuals does doesn’t require AI.
When discussing the future of Actuals, AI inevitably comes up. But unlike many tech companies, Engel remains level-headed. He believes AI isn’t necessary for Actuals’ core functionality. “But what we can do with AI is ask questions of the data—allowing for a very human-like conversation with it.”

The first demo of this capability has already been released. So noted.

Regardless, Actuals has successfully navigated the critical early phase of a startup. The company is now on stable ground, claiming positive cash flow. The team has grown from just a handful of people a few years ago to fourteen today, with consistent revenue growth of 30-40% per year.

Scalability: the Achilles’ heel?

The concept behind Actuals clearly works. But from a distance, scalability appears to be its Achilles’ heel. The product is only relevant for companies with large transaction volumes—but not so large that they can solve the problem themselves. Engel has secured around forty clients, including Picnic, Helloprint, and Whoppah, and believes there’s room for a few hundred more. At the time of the interview, the team was considering whether to pursue this goal with external investors.

Despite that challenge, credit is due for the perseverance and independent vision. Four stars on The Elliott Scale.

This article is an English translation of the Accountant.nl article: Actuals: de stress van de tussenrekening te lijf, written by Nart Wielaard in Sept. 2024.

𝐀𝐜𝐭𝐮𝐚𝐥𝐬 – 𝐓𝐫𝐮𝐭𝐡 𝐈𝐧𝐬𝐢𝐝𝐞™