The repetitive process-oriented nature of Accounting and Finance functions make them some of the most ideal candidates for RPA.
Robotic Process Automation (RPA) in accounting and finance, harnesses the power of AI to automate high volume, repeatable and manual tasks such as recording transactions, report generation, data validation and many more!
In a nutshell, RPA analyzes data and drives decisions based on a set of pre-defined logic parameters in order to automate tasks formerly performed by humans. According to Gartner, RPA is the fastest growing segment of the global enterprise software market.
RPA in finance and accounting functions can be effortlessly deployed from a central controller and helps improve productivity, cut down costs, and manage compliance. By freeing up precious employee time, it helps them focus on more critical tasks, helping them focus on strategic tasks in the company.
Use Cases of RPA in Accounting and Finance
Given the promised business benefits of RPA, over 70% of finance organizations have reported using or piloting Robotic Process Automation (RPA), according to Gartner. Some of the most common use cases of RPA in accounting and finance include:
1. Accounts payable and invoice processing
RPA can help set up workflows to manage different vendor payments automatically. All you have to do is feed the data and the rest is automated.
Each invoice is validated against the defined data fields to extract and store the information. You can also configure it to separate invoices based on vendor, client, location, etc. It also cross-checks documents to verify whether the payments made are accurate.
Additionally, separate workflows can also be created to approve the accounts payables, process bulk payments, monitor outstanding balances and post year-end adjustments.
When processing approvals, the application forwards the received invoice to the appropriate authority as defined in the workflow. This drastically cuts down on process lag that often occurs when having to wait for the invoice to pass from one authority to the next.
2. Managing receivables
RPA can help automate the monitoring of receivables, such that the application sends out timely reminders to customers for long outstanding balances. It can also check and calculate the provision for doubtful debts, in line with the company’s policies.
3. Tax management
RPA applications can extract data from physical tax forms and populate the information into digital tax forms. We can configure the application to carry out many rule-based tasks such as:
- Data extraction and information gathering
- Data validation
- Running reports
- Calculating taxes based on compliance norms
- Calculating transfer pricing or international exchange rates
- Managing workflows
- Calculation of adjustments
- Information population into work papers or tax software
4. Financial statement closing
RPA helps update comparative figures for the financial statements, calculate and post exchange gain or loss valuations, and post repetitive closing entries.
It automatically collects information for disclosures and processes the fair value adjustments and entries. It reads and populates financial statements and is also capable of conducting ratio analysis.
5. Regulatory compliance and reporting
Regulatory compliance and reporting involve multiple departments, systems, and applications. But with RPA, finance teams can ensure timely and insightful reporting that can add significant value to your business.
An RPA-driven system can automate tax-related tasks such as capturing and manipulating data to auto-generate regulatory reports, closing out sub-ledgers, delivering financial filings to jurisdiction-specific regulatory authorities, optimizing the end-to-end tax management process, reducing risks, and cutting down costs. Using RPA for reporting also helps you maintain a detailed audit trail.
6. Inventory management
In order to ensure that the company’s inventory is properly maintained and its value documented, RPA can be used to verify every entity present in the inventory and perform three-way matching.
The total price of the inventory along with the number of items and their respective quantities are calculated. Based on this information, the application generates reports in multiple formats, as required.
7. Supplier onboarding
Although most companies automate their invoice processes, they still manage supplier onboarding manually.
But with RPA, this task can be done more efficiently where an RPA application is designed to check all the crucial details about a new supplier, such as their credit score, tax reports, testimonials, track record with previous customers, etc. before approving them to be onboarded.
The Benefits of Using RPA in Accounting and Finance
RPA technology is relatively simple to implement and offers a lot of benefits. The implementation can start with applying RPA to simple rules-based finance and accounting tasks, and can be scaled up to take over more complex functions as the need arises.
RPA helps streamline processes and bring in more process efficiency, thereby reducing costs and improving compliance. It is due to these benefits that 59% of Finance & Accounting leaders believe RPA will make their business more competitive over the next two years, according to the 2019 Economist Survey “Advance of Automation”.
Some of the most prominent benefits of using RPA technology include:
- 24/7 Performance – Unlike humans, RPA applications have no time constraints. They can work non-stop, increasing the finance and accounting functions’ overall productivity.
- Freeing up employee time – RPA reduces the human effort involved in carrying out slow and repetitive tasks. Hence, employees can use their time in a strategic manner and take on more value-added tasks.
- Customizable workflow – Depending on the requirement, an RPA application can be customized to carry out specific parts of the accounting process. Additionally, it can also carry out multiple processes at once, such as accounts payable and receivable, expense management, tax calculation, and report generation.
- Non-invasive technology– RPA applications do not interfere with or require a change of the existing IT infrastructure. Instead, RPA technology integrates itself as a layer or bridge on top of or across the existing infrastructure, reducing the disruption to the existing IT strategy and framework.
- Reduced error-rate – The automation of tasks produces consistent and accurate results, thus reducing the probability of error in the output.
Conclusion
RPA usage is skyrocketing in several functions of an organization, driving even more value and efficiency in the areas of finance, accounting, audit and operations. Several gaps in the financial and accounting automation can be closed with RPA. It automates mundane and repetitive tasks to optimize turnaround time, reduce costs and enable your workforce to focus on tasks they truly enjoy.
If you’d like to learn more about this topic, please feel free to get in touch with one of our experts for a personalized consultation.
