Responsible for the most critical processes in an organization, the CFOs are under constant scrutiny and pressure to ensure efficiency, accuracy, and compliance in every operation carried out day to day. A regular day for a Chief Financial Officer includes succession planning, staffing, tax reform, mergers, and managing core services. Although these issues are as pressing as the accountants could imagine, there are two critical areas where accountants often turn pale – the impact of new technological advancements and the ability of the workforce to adapt quickly. In today’s volatile market, CFOs need to be more vigilant in order to serve as the catalysts for digital transformation within their organizations.
In a larger sense, technological advancements are having a greater effect in terms of economy that will pave the way for change in businesses’ approach. The 21st century has seen some rapid shifts in technology like automation, block chain, and artificial intelligence that some call the ‘Fourth Industrial Revolution.’ This in turn brings in immense changes in various ways such as customer demands, employment practices, and streamlining business operations, but can have adverse effects on accountants. So, what could be done to lift the weight off CFOs’ shoulders?
Cometh the hour, cometh RPA
Robotic Process Automation (RPA) is a new automation technique that harnesses artificial intelligence to reduce human intervention in repetitive, soul-crushing tasks. RPA is arguably the fastest automation tool in recent times as accounting and finance operations are going through a rapid change across organizations.
Robotic Process Automation is estimated to account for approximately 40% of Finance and Accounting tasks by reducing manual effort. A recent poll suggests that 58% professionals are looking forward to process automation in the accounting processes.
As organizations are looking to stay competitive and vigilant in decision making, automating the best processes in accounting brings out the best output faster. But why is RPA non-invasive? What makes robotic accounting a trend to follow?
RPA serves a multitude of benefits that are both financial and operational:
Streamlined workflow: The software bots can run multiple processes at the same time; accounts payables and receivables, financial planning and analysis, tax reporting, general ledgers, and much more.
Uninterrupted service: Robotic accountants are absolutely devoid of time limitations. The bots can function throughout the year to enhance productivity to the highest level.
Error-free and reliable results: The automated bots never compromise on quality by promising error-free data with negligible output variability.
Easy installation: Robots can be deployed within 2-3 weeks, but organizations must be wary of where to install in your accounting operations first.
RPA, being a non-invasive application, is very different from traditional system integrations. As the adoption phase of RPA continues in 2020, the COVID-19 pandemic gives you all the more reason for thought leaders and finance professionals to leverage RPA once normal business resumes. With most of the workforce functioning from remote locations, organizations are trying to rationalize their current business strategies. This is where RPA comes as a lifesaver to “bridge the gap” between disparate systems, serving as the last mile in process automation before newer finance systems are adopted. RPA is definitely one of those effective tools that will deliver best-practice functionality with an assorted platter comprising core financial services, financial planning and analysis solutions. The best bet for RPA currently is to use it in a way that automates some of the most manual, tiring tasks to interface with systems. So, what can RPA be used for in finance and accounting operations?
- Downloading spreadsheets and attachments from emails and collating entries to post them into a centralized general ledger.
- Collating all the required data required for intercompany reconciliation that may be within one or more multiple general ledgers.
- Extracting data from invoices through PDFs using OCR technology and then rekeying invoice data from an accounts payable tool into a central invoice repository.
- Automating order entry processes such as purchase order taking, customer credit checking, and stock checking to fulfill orders and pricing calculations.
- Downloading and collecting financial plan data from various sources and processing it offline before moving into a financial planning and analysis (FP&A) system.
- Cross-checking vendors list in the master file and adding them in case not found in the file.
Listed below are some of the scenarios where RPA can be deployed in financial close situations:
- Downloading PDFs and backup details and collating nonfinancial system metrics for disclosure solutions.
- Rekeying accounts data from bank statements into reconciliation management templates.
- Extracting journal entry details from downloaded spreadsheets to enhance journal entry routing solutions.
- Automating email confirmations whenever required throughout the financial close cycle.
- Avoiding accounting errors and fraudulent financial practices by adhering to the Sarbanes-Oxley Act Section 404.
- Comparing account balances and automating input preparation for intercompany reconciliation.
- Uploading account balances of customers from bank systems to treasury systems to remove manual intervention.
RPA also saves the trouble of getting budget approvals, incorporating mergers and acquisitions, managing talent, and adhering to compliance requirements such that CFOs could focus on value-added propositions such as building customer relationships.
The old traditional way of doing business may work for your existing clients, but will not attract the clients of the future. The clients of tomorrow can take care of their compliance needs so that organizations like yours could focus on advisory and planning services. Either way, it’s likely no surprise that RPA is set to drive end-to-end process transformation across as much as 40% of financial processes in the next decade.