Robotic Process Automation, is an increasingly popular solution to address the limitations of legacy and disparate systems found in finance and accounting operations. It improves operational efficiency across a wide array of responsibilities and can also enhance internal customers’ access to shared services and critical data. Accounting is a prime field for automation because of its many repetitive, time-consuming tasks like record keeping, data entry, cross-verification, reporting, and compliance. The structured, rules-based processes of accounting workflows are ideal for RPA. This post will explore some of the most compelling use cases for automation in accounting.
Why Accounting Needs RPA
Accounting technologies have advanced considerably in recent years to improve financial management workflows. New software and capabilities, coupled with always-improving telecom infrastructure, help finance teams work from anywhere at scale. However, these advancements introduce a problem: how to efficiently utilize disconnected data sources. Many accounting tasks rely on legacy programs or infrastructure and require data from several disparate, unconnected systems. Connecting multiple data points means repetitive, often manual processes are required to ensure accurate record keeping. Fortunately, RPA solutions can fill these voids and
improve operational efficiency.
Mission-Critical Use Cases for RPA
Automation has proven invaluable in mature industries like
insurance, and accounting teams are also unlocking its potential to increase efficiency and improve the customer experience, both internal and external. The following use cases capture some of what’s possible.
1. Accounts Payable (AP)
RPA is an ideal solution for accounts payable teams and specifically for invoice processing. Since vendor invoices can vary wildly in form and complexity, accounting professionals must often cross-check them against outstanding POs before approval. Robotic Process Automation paired with
OCR (Optical Character Recognition) technology can complete much of the verification process. Bots – an informal name for the software instructions RPA employs – can be programmed to auto-extract information from vendor invoices and match that data to a corresponding purchase order. This cross-checking ensures invoice validity and allows employees to focus on invoices that contain errors. Bots can also be programmed to reconcile payments as they’re received and send confirmation emails or other communications. Properly configured, RPA can follow credit and payment approval workflows, track receipts, route orders, and generate alert notifications for AP discrepancies.
2. Accounts Receivable (AR)
AR is another functional area where RPA provides value. When one company owes money to another, timely collection efforts are critical. Yet, because accounts receivable teams typically face heavy workloads, it’s easy for required communications to be delayed, potentially having a negative impact on cash flow. Fortunately,
RPA is ideal for eliminating a backlog of repetitive tasks. Bots can assist with account setups, managing customer information, generating sales quotes, and sending invoices. RPA can also process accounts receivable payments and automatically send receipts to payors. The customer experience also improves since bots can process transactions (and respond to inquiries) 24 hours a day. RPA can even be configured to monitor credit balances and send alerts when accounts exceed predetermined thresholds.
3. Customer Onboarding
RPA is an indispensable tool for customer onboarding thanks to its speed and accuracy. It eliminates the human errors that are inevitable when data is entered manually, simultaneously improving quality and data standardization. Accounting teams can expedite customer onboarding by employing bots to process submitted forms and documents.
Data validity also improves when bots compare information to existing rulesets (to ensure compliance). RPA can automatically transpose new client information into all relevant company systems as these checks are completed. Beyond onboarding, bots can be designed to detect changes to customer account information and subsequently update any open or future AR requests.
4. Intercompany Reconciliations (ICR)
A critical but often tedious function of accounting is ICR. Keeping a clear and balanced record of the transactions dispersed amongst various departments or branches helps with financial forecasting. Once again, RPA can eliminate the bulk of the data entry work associated with intercompany reconciliations. Bots can verify data from multiple sources, use rules-based decision-making for ICR approvals, and auto-generate relevant notifications for those that do not. These discrepancies then undergo human review for final determination.
Organizations can automate payroll tasks with RPA and reduce much of the administrative overhead. As payroll is typically a highly structured process, nearly every task can be improved, from checking accuracy of benefit deductions to verifying vacation balances to automatically entering payroll data into an
ERP system. RPA can also process deduction calculations for taxes, run payroll events, and auto-generate reports based on these transactions.
6. Financial Reporting
It’s no secret that reporting is a key responsibility for accounting teams everywhere. Fortunately, because most financial reporting tasks involve structured data entry and processing calculations,
rules-based automation is the perfect fit for gathering requisite data and generating these reports. Whether it’s creating P&L statements or generating system reports to assess financial performance,
utilizing bots ensures fast, accurate results. Finance teams can also use RPA to help with the processes of filing regulatory reports or conducting variance analysis.
7. Fraud Detection
Finally, RPA can serve as a second set of eyes in detecting fraud or malicious activity. Since bots execute a specific set of rules, they can be designed to comb through data for specific patterns and/or deviations as often as makes sense. If unusual activity is detected, they can create and route alerts to the appropriate support personnel for further investigation.
Automate More than Journal Entries
Accessing data residing in other systems is a fundamental part of accounting, and today, this means finance employees spend much of their time manually gathering or reconciling data. RPA streamlines the data management between systems so that employees can focus on high-impact work. Organizations that leverage this technology are experiencing tremendous gains in efficiency, quality, and throughput across a wide variety of functions. They also see improved satisfaction from both employees and customers, inside and outside the organization. When deployed properly, RPA can deliver significant value for accounting teams everywhere.
To learn more about how RPA can improve your business processes, download our free “Executive Guide to Automation.”Or, if you’re ready to get started today, contact us now to learn more.