Disruption is central to the evolution of any idea or industry. From Tesla’s disruption of the auto industry to Facebook’s disruption of social media on mobile devices, every disruptive technological development starts with an idea. Actuals, a Dutch startup based in Amsterdam, falls in the same realm with its disruptive combination of technology meets accounting to assist businesses in areas of financial costs, audits, reporting and database points.
Accounting is one of the many old school industries that has failed to keep up with technology. The big four accounting firms – PwC, KPMG, EY and Deloitte – are now essentially servicing their customers through consultancy. For Peter Lem, Peter Engel and Stefan de Kraker, the co-founders of Actuals, it was evident that there is a better way to do this. They explain their journey as entrepreneurs bringing technology to accounting.
Technology to analyse data at scale
It is central to understand that Actuals assists businesses with its ability to analyse various forms of data at scale. This is possible because of the journey of the individual co-founders of the company. Before starting Actuals, Peter Lem and Stefan de Kraker worked at a digital consultancy. This experience made them familiar with technologies needed to process and analyse different forms of data at scale.
Peter Engel, the co-founder and managing director at Actuals, was working with one of the big four audit firms back then and was looking for ways to modernise the audit process for his clients. When the three of them connected through a mutual connection, it led to brainstorming and they were immediately excited by the “idea of combining traditional accounting concepts with big data solutions.”
Engel explains that the need for big data solutions in traditional accounting is needed not because the “accounting firms struggle with receiving, processing and managing the data flow of their clients.” He says that these big four accounting (audit) firms predominantly service their clients through consultancy, not by technology. He explains that these four dominant players are not able to “build, sell, maintain and support software.”
For him, there was a clear gap that these four accounting firms were unable to fill – the need to receive data by connecting with systems of clients. Another helping factor was that the clients of these big four firms wanted to be independent of them by owning the technology and ensuring it was separate from their services. This alone made business sense as a minimum viable product.
Solving the data source problem for fast growing companies
Peter Lem, co-founder and CTO, says Actuals solves the problem of not having all transactional data in one place by “offering a modern and holistic data reconciliation platform.” This platform can be accessed by any internal and external stakeholder and allows the clients to work towards a fully “multi data source” reconciliation of transactional data.
Actuals believes that all fast growing companies need to be in control at some point and it helps these companies grow in a controlled way. For clients though, one of the real challenges has always been bringing their existing data and reconciling them. Actuals has made sure its platform is able to do that for its clients.
The startup offers REST API services, file drop zones, secure email service and native connectors to a variety of third party solutions. Lem explains the idea is to make it easy for finance and control professionals to work with Actuals even if they have limited technical background or IT resources. “The average time it takes from zero to insight, is somewhere between a few hours and less than a week,” he adds.
Common problem with financial data
For Actuals, it is the exposure to data of its clients that helps eliminate all redundancies and let them focus on their growth. After working with clients like HelloPrint, Takeaway, Vanmoof, and others, the co-founders say that one of the common problems they see is the specific role of many third party solutions in the financial landscape of an organisation.
Peter Lem, CTO of Actuals, adds that the use of third party solutions varies from order databases, accounting solutions, to payment service providers, invoicing and subscription applications. Actuals team feels that this makes it difficult for organisations to “track and trace all transactions and reconcile these without having to go into every application.”
Actuals has designed its platform to eliminate this common problem by becoming a “single source of truth” for its customers. It ensures that all transactional data is brought together on one platform, allowing for matching and reconciling orders to payments, payments to accounting.
Reconciliation is manual but Actuals automates it
For finance teams, their abilities get limited by the fact that a lot of reconciliation efforts are manual and they usually need to be done at the end of each month. These efforts are typically executed manually with some amount of automation. Actuals makes this process fully automated and the results are available to finance teams on a daily basis.
“This includes collecting data periodically from different solutions, processing and reconciling the transactions, managing customer specific exceptions (for instance cancelled orders or refunds) and providing the results both in our reporting environments, mails or the ERP of the customer,” Peter explains.
Actuals is also able to customise its platform to different customer needs since its platform is aimed at reconciliation. It is able to do this while still facilitating a fully automated process.
When asked for an example, Peter says that most of their customers have a payment service provider (PSP), who handles the online payment process. However, the customers do struggle with the cost involved with the payout to the customer since they manually compare the transactional data provided by the PSP and registered amounts in the accounting system. Actuals collect and automates this process saving a significant amount of time for the finance team and helping them control costs per transaction.
Peter also says that finance teams manually check accounting systems to see if all invoices are registered correctly. Actuals found a way to automate this as well by using AWS services. “We have customers for whom we have processed more than 20,000 PDF invoices, processed them specifically per supplier and reconciled them with the accounting data. As a result, the customer knows which invoices to pay and which to challenge, which is further automated,” he adds.
AWS to power this new way of finance
Actuals, like many other European fintech players, uses Amazon Web Services. Lem says that they use AWS for data storage and that the cloud service provides out of the box functionality for monitoring. He adds that Actuals stores huge amounts of data, including more than 1,000,000,000 rows of transactional data.
All of this data gets processed daily for its customers and they automatically receive a message whenever there is a problem with a database, allowing them to act immediately. For Actuals, AWS plays a vital role in its data storage requirements while monitoring is one of the things they do afterwards.
“Apart from system monitoring, we also use several security, risk and compliance services from AWS such as Config and Guard Duty to monitor access to systems and the configuration of the systems continuously. AWS also facilitates extensive encryption and backup functionality so that we can guarantee the safe storage of our customer’s data,” Peter adds.
The startup is able to meet requirements of its end customers with AWS and is also able to be an ISAE 3402 compliant company without overloading its small team. With AWS powering most of its core functionalities, Peter says Actuals is exploring the opportunity to list itself on AWS Marketplace, as the logical next step in its relationship with AWS.
Aiming to become number 1 solution for automated reconciliation
The co-founders of Actuals say in unison that every company can “automate their reconciliation efforts and have a fully automated monthly close.” In order to help every company automate their reconciliation efforts, Actuals will seriously look at funding for further growth during the course of 2022. However, the startup needs to be precocious since it needs to meet the standards required of an ISAE 3402 TYPE II certified company.
This year, Actuals is also looking to strengthen its team on all positions and plans to hire a number of new people. All of this will culminate in Actuals expanding its core capabilities of serving all finance teams that recognise the need for automation and the value it brings to each and every company.
Actuals team says that working with Microsoft Excel or Google Sheets is no longer sustainable or future proof. The finance and control team is already being forced to look at other solutions and Actuals wants to be the number one solution for the finance and control team when they look beyond their existing workflow.
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