Your Robot Accountant Has A Name, It’s Dixie
Back in June, I wrote a post titled “Have You Met Your Robot Accountant Yet?” and truth be told I hadn’t met mine at that time and the post was more based on the probability of it happening than actual real life examples. However, a few weeks ago I found it reading the Danish business newspaper Borsen. A company called Dixie had created a robot accountant for small and medium-sized businesses to take care of classic back-office tasks such as expense reporting and annual reporting. So a few hours later I reached out to the company’s co-founder Rasmus Severinsen to learn more about what this company was all about.
“Dixie is currently clearing around 60% of what we used to do in manual fashion”
Rasmus was kind enough to let me ask a few questions to understand just how far automation has come within the space of accounting or what we would call classic bookkeeping tasks. First of all, I wanted to understand more about how it works in practical terms.
Q: How far are you actually taking automation?
A: …to give a concrete example, our first task in line for being automated was the receipt-to-transaction matching. Usually, a traditional freelance bookkeeper would at most face a .csv file with bank transactional data (date, text, amount, currency) and a Dropbox folder containing an array of file types with receipts or invoices. Every receipt needs to be assigned to a transaction, which is simply done by looking at a receipt, identifying a merchant, date or amount, and then search through the list of transactions to find the correct match… The way Dixie solves this is by substituting the manual processing with a manual approval flow. We've built a "machine" that scrapes data from our obtained files from our customers, the data is then processed and a date, merchant, and amount is attempted identified. This now scraped and contextualized data is then matched with our lists of transactions for each individual customer and given an arbitrary "score". The score will determine whether or not the match should be suggested to a human or whether the confidence level is too low to potentially 'disturb' a human with as a suggested match. Our machine is built so that every approved or disapproved suggested match will teach our machine to better understand receipt and invoice data as well as the correctness of the transactions. Currently, our machine is clearing around 60% of what we used to do in a completely manual fashion. How far we will take this technology is basically to the limit where we can maintain an error-free matching procedure with minimum manual labor.
I know that was a bit of a long answer but I also think that for many people automation of more skilled work is something that is only talked about but not actually happening. So to illustrate that this is very real we also need to make it very concrete how it is happening and Dixie just made it very concrete and real! But how far is Dixie actually venturing into a company’s accounting books?
Q: Do you have full control over the company books or are you only handling a subset of their costs?
A: We’re a full-service solution for all administrative burdens…and have full access to our customer’s books (in fact, we create their books)…
So given that the robot is currently clearing 60% of the transactions it’s not a fully automated solution yet but it’s getting really close and the ambition is as Rasmus outlined in his reply to reach a fully automated error-free matching procedure.
What is rule based can be automated
Another challenge about automating accounting is how to keep up with changing regulations? It is one thing that the rules can be coded but since there are always revisions to the rules the coding needs to be up to date at all times. Here, Dixie has taken a really proactive approach.
Q: How do you keep your system updated with changes to accounting rules?
A: We have a dedicated operations team whose task is also to stay updated on the legal framework within which we operate. If we face environmental changes (governmental legislation or the like) then we simply adjust accordingly and educate our customers if needed. When it comes to the automation part, it has not created any obstacles yet, and we find it unlikely that any radical changes will throw us off. Rather, we actually work with e.g. Erhvervsstyrelsen [a Danish legislative body] in their current efforts of digitalizing and automating the submission process of companies' annual accounts by providing our knowledge and inputs as to how such processes can be optimized. So we are very much "in the field" when it comes to that.
So not only is Dixie staying on top of any changes that are coming by having a dedicated team taking care of it and educating the customers they are even proactively helping the authorities become more digital themselves. That’s a great way to not only future proof your business model but making it even more relevant to the customers. Another point I take from this is that just because current rules and regulations haven’t caught up with reality it doesn’t mean you shouldn’t dive into a business idea that’s dependent on certain changes or interpretation of the rules. No, instead you should start a proactive dialogue with the legislators about how your business model can make a positive difference and get buy-in to change the rules.
Can you fully replace the accountant?
So this is the one million dollar question. Is automation purely a help to the accounting department or can it fully replace it?
Q: How much of an accountant’s / bookkeeper’s work are you actually able to replace?
A: It would be bold to say "everything", but it is tempting… That being said, we believe that today it should be possible to automate around 80% of the daily tasks performed by a traditional bookkeeper. This does not only include receipt handling but data collection, ledger entries, VAT assignment, controlling etc.
So somewhere between trying to be modest and an 80% answer I read that the truth is that once Dixie has automated 80% of the accountant's job they will take a stab at the remaining 20% eventually giving accountants and finance professionals more time to do“forecasting, deep-dive analysis, consulting etc.”. 100% of jobs have been automated before and it will happen again and accounting seems to be up next. The only question left is whether or not Dixie can take on the world or remain an offering to small and medium-sized companies only?
Q: What’s stopping you from taking this concept to big companies as well?
A: The biggest difference between small and large companies is the fact that small companies usually do not have a dedicated in-house resource to accounting, whereas large companies usually have an entire department. The offering we are building needs to accommodate that. However, most of the technology we are building is directly applicable in larger companies with relatively low efforts of modification for implementation.
So it’s accounting automation coming to a town near you and while Dixie is so far a concept offered only in Denmark I’m sure there are other companies out there offering to do the same for your company. So what’s stopping you from jumping on the automation train?
As always let me know what you think about the post by liking, sharing and commenting and I certainly also encourage you to have a talk with Rasmus and Dixie to see what they can do for you! You can write to Rasmus directly at email@example.com or visit the company at www.dixie.io.
For posts in my latest series on how the CFO should transform Finance, you can continue reading below and further below there are more posts about finance business partnering.
I also encourage you to take a tour of my old posts on finance transformation and finance business partnering and not least “Introducing The Finance Transformation Nine Box” which is really that starting point for the transformation. Last but not least, you should join my Finance Business Partner Forum where we will continue to discuss this topic.
Anders Liu-Lindberg is the Senior Finance Business Partner for Maersk LineNorth Europe and is working with the transformation of Finance and business on a daily basis. I have participated in several transformation processes amongst others helping Maersk Drilling to go Beyond Budgeting and transformed a finance team from Bean-counters to Business Partners. I would love the chance to collaborate with you on your own transformation processes to help you stay out of disruption. If you are looking for more advice on how to get the most of LinkedIn I also have a few tips to share as well as if you want help in your job search. Don’t be shy! Let’s get in touch and start helping each other.