How Robotic Process Automation (RPA) is Becoming Increasingly Relevant in Today’s Finance and Accounting (F&A)

How Robotic Process Automation (RPA) is Becoming Increasingly Relevant in Today’s Finance and Accounting (F&A)?


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Digitalisation is becoming increasingly relevant in every sphere of our lives, be it the economy, business, industry or society. One of the more recent tools to enhance the digitisation of internal business processes of a company is Robotic Process Automation. RPA implementation improves financial and accounting processes as they can run at higher speed with better quality output optimising Full Time Equivalent (FTE) and enabling the accounting and finance professionals to focus on more complex tasks.

What is RPA?

RPA doesn’t involve any physical robot. It essentially employs software robots running on a computer to automate repeatable high volume business processes. Mostly structured data are worked upon by combining artificial intelligence including machine learning, natural language processing etc.

We can define a set of instructions and enable RPA bots to mimic most of our interactions with computers for carrying out high volume error-free tasks with incredible speed and accuracy.

Why is RPA different from AI?

Most of us with a non-technical background seemingly baffled by these two words and their respective uses. Simply put RPA can deal with only structured data while AI due to its inherent intelligence can deal with unstructured data too. RPA technologies and applications haven’t become all that intelligent up till now.

Repetitive and rule-based tasks needing much manual effort can be easily handled by RPA however without any neural network providing intelligence gathering with experience. As a result, any changes in automation will go unnoticed by an RPA bot without detecting anything on its own. In an F&A context, when the legitimacy of business expenses can be validated by AI, RPA can’t just decide if a business expense on personal and family entertainment can be approved or not.

Why has Digitization and RPA become so critical as never before?

The last year has witnessed widespread financial disruptions for most of the companies due to pandemic when only technology and digitalisation stood by them as their saviours.

RPA as a recession-proof saviour for business continuity has become critical for business survival and growth. Automation driven by smart technologies e.g.ML and AI is enabling more robust and cheaper business solutions across all industries.

More F&A professionals are seeking RPA implementation and creating new business codes. Remote working as a new norm has heightened the need for greater operational flexibility coupled with higher capacity.

The world has now seen more digital transformation in the last few months than in the preceding decade, with more than 70% of global businesses planning to switch over to RPA and increase RPA spending soon.

As economic regrowth continues to hurt all businesses, organisations are reassessing integrating RPA in F&B functions and promoting automation to establish a cost-effective resilient work culture.

What are the benefits of implementing RPA in F&A?

Several opportunities exist for RPA to realize a competitive advantage and include

  • Cost savings in many geographies as robots cost much less, 10 to 20% of the cost of a full-time employee.
  • RPA can accomplish very high data accuracy consistently.
  • Can achieve reduced transaction times and improve efficiency.
  • Can work 24/7/365 and result in high FTE.
  • Cycle times can be reduced drastically improving throughput.
  • Can reduce employee attrition because of reduced frustration caused by repetitive draining daily tasks.
  • High speed achieved by RPA can help maintain deadlines during the financial year-end.
  • RPA being much flexible and scalable can put a significant brake on unnecessary cost escalation.

What are the areas of RPA applications in F&A?

Following are some areas where RPA can be implemented effectively for organizational growth and sustainability

  • Bookkeeping
  • Accounts Payable and Receivable
  • Invoicing
  • Vendor data management
  • Days sales outstanding
  • Logistics management
  • Client Onboarding
  • Reconciliations
  • Expense monitoring and management
  • Inventory management
  • Payroll
  • Tax compliance and reporting
In addition, some areas of operational accounting and finance, auditing, financial statement preparation, planning and forecasting can also be automated with RPA through AI deployment using improved ML algorithms.

What F&A tasks cannot be performed by RPA?

Not every F&A task can come under RPA and tasks usually not suitable for RPA include:

  • Complicated tasks such as allocating funds, performing due diligence etc.
  • Decision-making non-standard processes
  • Infrequent and uncertain processes
  • Processes needing improvements and streamlining
  • Processes with too many exceptions

How to implement RPA effectively in F&A?

Most RPA implementations are normally easy and straightforward, not requiring more than 3 months to identify processes, configure framework, validate and launch RPA bots into operations.

Below is a deployment guideline for effective use of RPA in F&A

  • Identifying high volume, error-prone and repetitive processes with a significant impact on both cost and revenue
  • Selecting sub-processes that can be easily automated with RPA e.g. standard processes with few exceptions
  • Selling ideas to top management and F&A team members with an approximate budget
  • Taking other business process owners in confidence
  • Fragmenting the F&A process into the sub and sub-sub processes to better understand the process flow
  • Considering improvement possibilities with ROI
  • Selecting a dedicated team to work on the project
  • Exploring and developing ways for RPA implementation and assessing benefits and challenges
  • Running a real-life test
  • Validating through repetitive tests
  • Launching and going live
  • Ensuring post RPA maintenance after launch
What are the challenges in implementing RPA?

RPA implementation challenges can be rather serious unless strategic thoughts and proactive actions are not planned religiously.

RPA is high-tech and needs skill and expertise in technology besides accounting knowledge. The non-availability of the right human resources is often a big challenge for effective implementation.

There are processes with exceptions needing separate ML algorithms that can increase the cost of implementation.

RPA implementation needs a cultural shift in an organisation and is always a serious challenge for a company due to the fear of redundancy amongst employees.

Choosing the wrong accounting process for RPA is a common mistake resulting in poor ROI and increased cost.

Proven validated practices are not known and followed causing huge wastage of time in debugging.

Many companies don’t have sound IT and security policies. F&A professionals working upon RPA implementation in pockets may cause serious adverse implications for IT security, infrastructure and the entire business as a whole.

Maintenance is vital to keep your RPA running and achieving desired process efficiency. It is usually observed that post-implementation protocols are missing due to inadequate IT infrastructure, offering challenges to the organisation.

How can F & A outsourcing facilitate RPA implementation?

You can put aside a lot of headaches by outsourcing F&A for a smoother RPA transition. There are several reasons businesses outsource their finance and accounting functions and RPA implementation and a few of those are

  1. There is no need to sell your ideas for RPA implementation to inhouse F&A professionals
  2. Accessibility to skilled manpower as technology-savvy accountants familiar with RPA implementation is hard to find for the in-house accounting team
  3. The outsourcing companies performing F&A functions as their core competency do invest heavily in ‘best practice processes, employee training and sophisticated technologies and software which are normally out of reach for most of the businesses in the SME sector
  4. As outsourcing companies are committed to a much higher level of accounting performance, they continuously keep themselves updated on the latest technologies and RPA opportunities
  5. During unforeseen and trying business times as with covid pandemic, outsourcing can offer increased RPA transition and ROI by avoiding the wrong selection of processes for automation
  6. Last but not least, outsourcing can reduce RPA implementation cost by more than 50%
  7. Continuous training of internal employees on RPA

RPA is going to stay and as RPA adoption by companies surges, the need for standard processes has become paramount. We humans, previously busy in routine manual tasks, must now concentrate more on managing exceptions for ensuring RPA implementation on a higher scale encompassing many more aspects of finance and accounting.

As an outsourced accounting and financial services provider, IMC commits itself for robust RPA implementation well considering all implications on existing operating models and continuously exploring ways to effectively adapt to the changing requirements of its customers.

As expertise, experience, strategic planning and vision are indispensable in leveraging the benefits of RPA, we at IMC would like to provide our best professional support and enter into discussions on your journey towards RPA implementation.

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