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What is the Hedgi risk slider?

The main purpose of Hedgi is to enable users to “Hedge” their risk when it comes to write-offs. There is often some gray area when deciding what would be considered ‘ordinary and necessary’ expenses for operating a business. For example, a client dinner for a professional may be considered ordinary and necessary, but a Disneyland trip would not be.

This is where the crowdsourcing feature of Hedgi proves invaluable. As our users create and use Hedgi automations (rules for categorizing specific transactions from specific vendors), other users choose to either accept or override those automations. Hedgi continuously calculates the acceptance score for each automation. When a similar transaction appears in your account, Hedgi will offer the categorization that our users have chosen, and the acceptance rate of that choice.

An acceptance rate of 70% means that 70% of our users have agreed with the suggested category, whether it be a business expense or a personal expense, and how to categorize the expense for their industry. You can feel confident that by accepting the suggested categorization, you would not raise any red flags. If a suggested rule only has a 20% acceptance (i.e. Disneyland as a business expense), you are accepting a categorization that only a low percentage of users in your industry chose to write off that type of expense.

The Hedgi Risk Slider is a patent-pending feature that enables you to choose a risk threshold across your automations. If you set your automation risk tolerance slider to 70%, for example, all automations that have less than 70% acceptance rate will be deactivated. If you wanted to take zero risk, you would set your slider to 100%. This would mean you will only accept a suggestion that has been accepted by all Hedgi users. This is unrealistic because you would need to manually categorize nearly all transactions that appear in your Hedgi account. We find that 60% to 70% tolerance is a good low-risk range. This range will automatically categorize the majority of your transactions without raising red flags. This is a personal decision, and Hedgi does not suggest any risk tolerance nor take responsibility for any suggested categorizations in the platform.

In the screenshot below, the Hedgi automation risk tolerance slider is set to 70%. In the list of automations underneath, those with an acceptance score less than 70% have been deactivated and will not apply a category to your transactions. You will manually enter the categorization for those transactions and have the option to create your own automation to handle those transactions the next time they come through.