Over the last decade, the finance and accounting organizations are overwhelmed by massive increase in transaction volume, understaffed workforce, repetitive manual work, and large volumes of data. Eventually, the organizations have noticed an exponential increase in outsourcing of critical processes. As you might expect, the underlying rationale behind such a trend is mainly due to the unrelenting focus on efficiency and cost-savings by the senior management. Since ERP systems are no longer a tool to accelerate outsourcing, companies are looking for an automation technology to strategize the way business operations have been carried out so far.
The more time you spend on billing, ledgers, payrolls, and journal entries, the less time you will spend on strategizing financial planning and other value-added projects.
The New Finance and Accounting Arena
Since most of the processes in the finance and accounting landscape involve repetitive, rules-based, and frequent tasks, automation is widely embraced across organizations to exert influence. Fortunately, these mundane, soul-crushing tasks are exactly the reason why RPA is implemented to alleviate. Robotic Process Automation deploys software robots to perform menial tasks with negligible human intervention to automate up to 100% of rules-based processes while ensuring 100% accuracy.
According to a Deloitte report, over 50% of senior executives have indicated their willingness in implementing RPA in their business processes to save costs by 40-50%.
Caught in a spot between pressure of achieving cost-savings and relenting propositions from offshore providers, CFOs are inclined to seriously consider RPA to streamline business activities in their organizations. As accounting departments start crippling especially with the end-of-month transactions, using RPA to automate these tiresome processes will eliminate errors and reduce productivity time. While embracing the capacity of RPA in finance and accounting, it’s only fair to mull over the most potential use cases in the FAO arena.
RPA Accounts Receivable Automation
When an organization deploys RPA for the first time, their first choice of automation would be accounts receivables for obvious reasons. In the accounts receivables (AR) department, the employees deal with the gruesome work of receiving unique invoice patterns from their customers and vendors. Due to the high volume of purchase orders received in a single day, the employees manually collect data and bill them, resulting in mismatch of invoice data.
RPA helps the team by validating purchase data, monitor customer credits, generating sales quote and automatically dispatches invoices through emails. The software bots will eventually match and sends out reminders to process payments after validation.
RPA Accounts Payable Automation
As for the accounts payable (AP) department, handling invoices is one of the most time consuming and error-prone tasks. Since the workforce spends most of the time creating the invoices manually, human errors could turn out to be very costly. Due to the slow processing time, the payments could be delayed and might lead to hefty penalties.
With the help of Robotic Process Automation, the bots will be able to extract all the fields into the invoice and validate them. In order to create a uniform invoice pattern, the bots create invoices by filling the invoice form with the extracted data. When the invoice is due for payment, the software automatically credits the payment and avoids penalties for late and incomplete payments.
Automating Intercompany Reconciliation with RPA
Bank reconciliation is a very paper-intensive process since the accounts department is required to cross-check the money spent and money received to balance the final figures. Several financial organizations, regardless of the size, devote their valuable time checking and matching transactions manually, due to variations in account types, payment types, and payment complexities between banks. Due to longer hours of manual reconciliation, employees are dealt with duplicate entries, high scope of errors, and multiple transactions in a single invoice.
RPA eases the workflow by matching payment details with bank data and other records available. If the payments match, the records are said to be reconciled. If there are any discrepancies found in the invoices, the bots will send back the records for further validation.
Read more about: Automated Bank Reconciliation with RPA
Automating Tax Reporting with RPA
In order to adhere to the tax compliances, organizations will have to prepare multiple financial reports. While most of the organizations follow a template for tax returns, they still prefer spreadsheets to gather information from disparate systems and integrate the same to prepare reports. Since tax reports require a quick turnaround, manual intervention in this process could result in manual errors and slower cycle time.
Organizations opt for Robotic Process Automation to prepare internal and external reports for analysis by integrating information from various sources to embrace faster cycle time and error-free reports.
Read more about: Automating tax reporting with RPA
Automate Financial Operations & Accounting with RPA
This is another time-consuming function where balance sheets and income statement transactions are managed. General ledgers are used to create standard journal entries, sales data, and commission calculations. Manual journal entries could be error-prone and eventually takes longer time to ensure the records are reconciled.
RPA is the perfect candidate for finance professionals since automating general ledgers will reduce the efforts of employees. The software implements account reconciliation standards according to policies and reconcile the ledger based on the workflow. Once the reconciliation process is done, the ledgers are updated automatically.
Read more about use cases: Automate Financial Operations & Accounting with RPA
Automate Financial Planning and Analysis(FP&A) with RPA
Prepopulating financial forecasts based on historical data is one of the tiring tasks for finance professionals. The finance professionals also deal with preparing variance reports and load balances into planning systems. Due to extensive market research, ensuring error-free variance reports is a huge challenge.
When RPA automates error-free reports for all stakeholders, it provides latest financial forecasts at a faster cycle time to improve the financial planning in your organization. RPA also maintains latest updates on the latest capital investments and financial status of your organization.
Read more about: Automate Financial Planning and Analysis(FP&A) with RPA
The reason why RPA is showing great promise in the finance and accounting landscape is because of the diminishing offshore arbitrage benefits and the technology is much less expensive and more productive than offshoring. Automating the above mentioned functional areas will reap attractive benefits and ROI for the finance organizations by saving costs and yielding better results.