RPA in Finance and Accounting: Benefits & Use Cases Explained
In an increasingly saturated market, that’s clamored with fintech and individuals lacking technical expertise, RPA becomes the hidden force that continually guides entrepreneurs and CFOs forward along a growth-oriented path.
The digital economy is changing dynamically, and in these radical shifts, Robotic Process Automation has gained quite some traction. So much so that automation technology is piercing through all the industries, and is gradually becoming an integral part of the growth strategy of businesses.
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.
Robotic Process Automation is Becoming the Central Point of Focus in the Finance & Accounting Industry.
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.
But first, let’s quickly answer a basic question:
What is RPA?
Robotic Process Automation is employing smart software robots (bots) that identify, and mimic human interactions with core legacy systems, along with 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.
Must read for better understanding of RPA – Everything You Need to know About Robotic Process Automation
But that brings up fundamental questions like – What is RPA in finance? How does RPA translate to Finance and Accounting?
Let’s understand how;
RPA in Finance and Accounting
As stated above, RPA works exceptionally well in automating processes that are repetitive and operate in high transaction values.
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.
RPA translate benefits to these F&A institutions for it’s an automation tool that not only accelerates the process but also ensures there are no clerical errors.
According to the RPA reports by Protiviti, hundreds of financial institutions have successfully employed software ‘bots’. Amongst the study participants, 32% of companies consider themselves as ‘RPA leaders’, meaning they’ve employed automation virtually across every function within their enterprises.
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 and Automation, RPA delivers umpteen benefits that allow CFOs and other financial professionals to evolve and act following the variables that dictate the financial sphere.
Kyle Cheney, Deloitte Risk, and Financial Advisory partner quotes in a report –
Finance and accounting process automation can really run the gamut. Simpler, enhanced finance automation can address common, industry-agnostic accounting issues. RPA can build momentum by performing repetitive, manual financial, and accounting processes.
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 volumes of data, and answer to a massive influx of queries in record times.
Gone are the days when businesses had to bear significant 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 few weeks.
Finance and Accounting involve long-strings of number 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.
3. Competitive Advantage
Since the corporate culture is dynamic and ever-so changing, the importance of having a competitive edge can’t be stressed enough.
A slight variation in costs, or innovation dictates whether the company would benefit from lasting success or struggle to keep its operation running.
RPA automation in Finance & Accounting directly translates to these subtle yet essential advantages, thanks to low integration costs, higher accuracy, and easy scalability.
4. 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.
5. Address Compliance Issues
Humans can be dead-serious in regards 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. Bots run according to a set of established rules, deliver higher levels of quality, and substantiates 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, Account Payable (AP), and Account Receivable (AR) are two critical elements to the finance and functioning of any corporation.
Albeit AP and AR, both are crucial to finance and accounting. AP serves the ideal conditions for automation and promises a greater return on investment.
That said, let’s dig a little deeper and understand the implications of RPA for account payable. And, how it translates to business success.
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, a majority of financial leaders are timid towards implementing RPA in AP. Thanks to the popular myth of RPA inefficiency to deal with unstructured data, and non-structured invoices.
However, this hurdle can be easily overcome if you implement RPA with NLP, and other AI tools and ML technologies.
Examples of RPA in Finance and Accounting
A lot of Canadian banks, for example, have been eagerly adopting RPA technology with success.
Royal Bank of Canada, the largest financial institution in Canada is using smart chatbots for more than a year to improve customer service.
Also, the Guardian Group has embraced RPA technology in their processes and have seen early success in their journey. The technology has enabled them to calculate, copy, paste, access, or use existing business rules to handle, use, and feed data into the core enterprise application.
Here are 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.
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 amongst the leading RPA service providers in the industry.
So, if you have any queries regarding the RPA implementation process, its benefits, 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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