A survey of 751 financial professionals by the Institute of Management Accountants (IMA) found that, on average, it takes roughly seven days to complete the financial period closing process and two-thirds of respondents said that they rely heavily on spreadsheets. Considering that this increases both the time spent on financial statements as well as the risk of inaccurate results, you may have started implementing robotics process automation (RPA) to supplement and augment the human workforce.
Historically, finance team responsibilities include a number of highly manual and time-intensive processes such as account reconciliations and manual journal entries. When you start using your RPA system, software “bots” perform these tasks, thereby freeing their finance teams for more analytical tasks.
So, when you implement RPA, how do you get the most out of it so you can maximize your team's value?
Automation Potential in Finance and Accounting Value Chain
Do you want to get the most out of implementing automation in your finance function? To use it to your advantage, you may want to start with:
• Financial close: Post data from multiple sources to sub-ledgers.
• Risk management: Combine past and present transaction data from organizational systems to flag potentially fraudulent activities.
• Reporting: Aggregate data from various sources like email, organization systems and databases, and automatically generate reports based on standard rules.
• Payment processing: Automate pre- and post-payment validation and reconciliation, notify exceptions, monitor and identify potential duplicate payments, and automatically transfer pending payment requests into a suspense account to prohibit withdrawal.
• Collections: Automatically receive and post payments, send dunning letters, create reminder reports and a shortlist of customers to call, and automatically allocate work to collectors.
RPA Use Case in Finance and Accounting
Here's a real-world example of one way a company got the most from their system for invoice processing and ERP integration.
Challenge: Invoice processing and ERP integration
A company we are familiar with had an accounts payable team handling tens of thousands of invoices received by email manually, and posting them to their enterprise resource planning (ERP) system monthly. As the company deals with more than 2,000 vendors and each has their own invoice template, the process required analysts with experience to extract, process and post the invoices.
Solution: Combining a smart optical character recognition (OCR) tool and a pre-trained machine-learning model, a bot was created to populate all fields with the extracted data in the company’s ERP system. It also handled all the business logic, such as sending follow-up emails and archiving invoices.
Results: Implementing the use of bots resulted in a 60% reduction in overall workload and more than 90% success rate of invoice data extraction.
Why This Works: This was a suitable candidate for RPA because of the high volume and manual, repetitive nature of invoice processing. While RPA is a great integration solution for various systems, this particular use case also leveraged more of the advanced features around OCR and machine learning.
Finance Function Tasks That RPA Would Not Work For
RPA is not a panacea, but a tool that is applicable only in certain cases.
Finance tasks not suitable for RPA include:
• Complex finance tasks such as performing due diligence on acquisition targets, finding the lowest cost of funds or allocating an investment portfolio
• Anything that requires significant decision-making
• Anything that doesn’t happen frequently (e.g., annually) or where the frequency is uncertain
• Processes with too much complexity
• Bad processes (improve or optimize first!)
While RPA is not a complete cure to all business process issues, it is a tool that will make many of your finance and accounting processes more efficient.
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This article was featured on Forbes.com