RPA in Finance and Accounting: Benefits & Use Cases Explained
Robotic process automation or RPA is one of the most disruptive technologies of this era. Organizations with outdated legacy systems are seeking automation for the digital transformation of their business processes. RPA becomes the hidden force that continually guides entrepreneurs and CFOs on the path of automation.
A recent study by Deloitte even suggests that 52.8% of professionals are seeking to improve and enhance business operations by leveraging automation and analytics in the accounting processes.
The new-age organizations are under incredible stress to optimize costs, generate higher ROI, and boost productivity. Not to mention the challenges associated with scarce resources, lack of skills, and increased operational costs.
All these factors, if anything, have paved the way for the successful adoption of Robotic Process Automation. In this article, we’d touch upon the benefits of RPA in Finance and Accounting, the challenges that RPA aims to fulfill, RPA use cases, and more.
What is RPA?
Robotic Process Automation is employing smart software robots (bots) that identify and mimic human interactions with core legacy systems and web and other desktop applications to execute processes.
The core objective of implementing RPA in Finance and Accounting or any other industry is to automate repetitive processes and achieve efficiency and cost-effectiveness.
Want to read more about RPA? Here’s our blog that would help you understand RPA better – Everything You Need to Know About Robotic Process Automation
RPA in Finance and Accounting
The financial and accounting industry involves a myriad of transactional processes that follow the same pattern- mundane, repetitive, and time-sensitive. On top of that, these processes are data-sensitive, and a slight clerical error could result in substantial losses.
According to the RPA reports by Protiviti, hundreds of financial institutions have successfully employed software ‘bots.’ Among the study participants, 32% of companies consider themselves as ‘RPA leaders,’ meaning they’ve employed automation virtually across every enterprise function.
RPA translates benefits to these F&A institutions for it’s an automation tool that accelerates the process and ensures there are no clerical errors. Now that we know why automation is essential to the growth of the F&A industry, let’s start with the associated benefits.
Benefits of RPA in Finance and Accounting
When it comes to Finance automation, RPA delivers umpteen benefits that allow CFOs and other financial professionals to evolve and act following the variables that dictate the financial sphere.
Image Source: pwc.com
Here are a Few Key Benefits of RPA Implementation in Finance and Accounting:
RPA bots are scalable and can be called forward to manage high data volumes and answer a massive influx of queries in record times.
Gone are the days when businesses had to bear high labor costs when demand/workload spikes. In today’s time, with insightful guidance and a reliable RPA service provider, you can automate F&A processes in a matter of a few weeks.
Finance and Accounting involve long strings of numbers and repetitive, rule-based transactional processes.
Upon successful implementation of RPA, financial institutions can accelerate these transactions whilst enjoying increased efficiency and reliability of data with minimal errors.
Since the corporate culture is dynamic and ever-so-changing, one can’t stress the importance of having a competitive edge enough.
A slight variation in costs or innovation dictates whether the company would benefit from lasting success or struggle to keep its operation running.
Innovation in Data
The financial and accounting industry can benefit from RPA implementation as it offers deeper insights into business operations via a smart amalgamation of the legacy and new data.
The peculiar combination of data in one system purveys better reporting and insights for business growth.
Address Compliance Issues
Humans can be dead-serious in regard to work, but part of being a human is making mistakes. Numbers are essential to Finance, and even if a single digit goes wrong- an entire system could go haywire.
That’s not the case with RPA bots. They run according to a set of established rules, deliver higher quality, and substantiate financial success.
Well, those were some common benefits of RPA in finance and accounting.
However, if we were to focus solely on the accounting aspect of the business, in that case, Account Payable (AP), and Account Receivable (AR) are two critical elements to the finance and functioning of any corporation.
That said, let’s dig a little deeper and understand the implications of RPA for account payable. And how it translates to business success.
The Role of RPA in Account Payable
Account Payable is a critical part of the day-to-day functions of any financial institution. Being repetitive and time-consuming, AP checks all the boxes for RPA automation.
Despite the repetitive nature of RPA, most financial leaders are timid about implementing it in AP. Thanks to the popular myth of RPA inefficiency in dealing with unstructured data and non-structured invoices.
However, this hurdle can be easily overcome if you implement RPA with Natural Language Processing and other AI tools & ML technologies.
3 Use Cases for RPA in Account Payable Processes:
1. Procure to Pay:
RPA streamlines the collection of vendor invoices and automatically assigns these to the workers based on a pre-established set of rules.
Implementing bots against FTEs radically reduces the manual hand-offs and eliminates mistakes by double-checking for vendor invoices and payments.
2. Order to Cash:
RPA bots log their audit trails, facilitating a thorough analysis of sales quotes, product orders, and more.
Leverage this data to optimize customers’ credits, track customers’ orders and invoices, and process payments.
3. Record to Report
With smart RPA bots, you can eliminate manual work and mimic human interactions to record journal entries. Smart RPA bots mimic human interactions with legacy systems and help reconcile accounts, collaborate, and manage transactions.
All that whilst maintaining a detailed audit record for regulatory purposes.
3 Use cases of RPA in Financial processes
1. Faster billing with RPA in accounts receivable:
Accounts receivable is the right fit for RPA. Since the traditional process is repetitive, rules-based, and requires consistency and accuracy, RPA offers you an array of benefits, such as billing your customers in a faster and more efficient manner. With more optimized processes, businesses would maximize revenue, save crucial time, and receive payments faster.
2. Increased fraud detection with RPA
With the implementation of RPA, fraud detection becomes easier, and the frequency of fraudulent activities also decreases. By notifying all the stakeholders of the relevant changes at business or regulatory levels, RPA ensures that no risk slips through the crack.
3. Optimization of financial reporting
According to a report by Gartner, human error with finance functions produce about 25,000 hours of rework which costs about $878,000 per year. RPA helps to remove these human inconsistencies and helps you deliver accurate results while ensuring data compilation in a more consistent manner.
Moving forward with RPA in Finance & Accounting
It’s no secret that Investing early in RPA gives your business a competitive edge by transforming the Finance and Accounting processes.
With a decade of experience and hundreds of RPA solutions delivered, Signity Solutions is among the industry-leading RPA service providers.
So, if you have any queries regarding the RPA implementation process, its benefits, and how it will work for your business, just drop us an email at [email protected].
What do I love about my work? Helping small business owners find uncomplicated ways to grow their own businesses. I’m always on the lookout for businesses who are interested in applying innovative tech strategy to their marketing plans.
When I’m not helping small businesses get better, you can find me on my couch watching Friends or Brooklyn Nine-Nine.
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