RPA in Accounting: Tech Priority for Finance Leaders

In 2021, growth is returning, and businesses can’t afford to slow down. More and more organizations worldwide are implementing solutions to be competitive. Chief Financial Officers (CFO) who want to be key players in the technology transformation of their field need to “leapfrog forward on finance tech”, underlines Alexander Bant from Gartner Finance. In a 2021 report, the research and advisory company surveyed 300 CFOs, heads of Financial Planning and Analysis (FP&A), and controllers. 

Their replies emphasized the need for “faster, more dynamic insights data and analytics” from these experts, the whitepaper says. Over 60% of Chief Financial Officers expect to spend more time on RPA (Robotic process automation) and other workflow automation in 2021. Over 60% expect that shift to be difficult but necessary to “free up finance from routine tasks” thanks to efficient and cost-effective automating methods. This is a needed transformation in an age that has shown that agility and resilience were two elements of success when facing disruptions. 

What is RPA? Why are RPA solutions good for finance and accounting? In this article, we give you all the answers. And practical examples to help you get started with RPA. 

How does RPA work? 

Robotic Process Automation (RPA) uses bots to mimic and automate time-consuming tasks usually performed by the human employees of a company. They can log into one or several applications, fill in forms, move files and folders, copy and paste data, etc. RPA bots can process standard transactions and reply to simple customer service queries. They can also push buttons, make cursors jump, etc. Robotic Process Automation is easy to implement in a company transforming digitally because it is a no-code to low-code solution. It does not require a team of developers and IT specialists because it does not require direct access to the code of the applications it uses. Thanks to machine learning algorithms, advanced RPA robots are sometimes even capable of learning and integrating with AI (artificial intelligence). This way, they can absorb from experience and limit the use of scripts. For instance, the software company UiPath teaches RPA bots how to handle “thinking tasks” like document understanding, AI computer vision, or the ability to chat with a customer.

In this article, we will focus on RPA for finance and accounting applications. However this technology can also expedite tasks in customer service, human resources, IT support, and supply chain management, just to name a few! Many sectors have invested in RPA in recent years, and it is about time Finance Leaders scale their stack making the most of what RPA solutions have to offer. 

When can Robot Process Automation help finance and accounting departments?

In 2016, the Institute of Management Accountants (IMA) surveyed 751 financial executives, managers, and analysts in the United States on their accounting processes. Two-thirds of them said they relied on spreadsheets in their work. On average, they said it took seven days to shift data from temporary to permanent accounts. In a joint survey conducted by IMA and Deloitte in 2020, 76% of respondents still felt their accounting processes were less than 75% automated! That means financial statements take up a big part of the organization’s activities. It multiplies risks of inaccuracy, time wasted, employee frustration, and productivity losses.

In accounting, financial services, and banking, RPA is similar to Excel macros. But RPA solutions are more comprehensive. They can run across several accounting and financial systems and process several interactions at the same time. RPA bots can automate data validations, process claims, fill forms, create reports and migrate data between applications…  For instance, if you want to automate the filling of PDF forms such as a bank reconciliation form or an income statement, RPA ensures transaction data flows seamlessly between systems while handling high volumes of data.

A company might want to implement Robot Process Automations for manual processes that are frequent and repetitive. Or tasks that, despite not being extremely complex, remain very tedious for a human worker. For the RPA to succeed, the process must be rule-based and work with structured data with clearly defined values. There should be a low variation rate between processes. Lastly, the inputs must be readable by the machine. Otherwise, the need for human action will happen too regularly to be worth it. Some operations that could be automated include collecting, (cross-)checking, migrating, and validating data, as well as reporting and reducing gaps between systems.

What are the benefits of RPA for finance and accounting? 

Working towards more efficient business processes ensures better ROI (return on investment). Here are some RPA use cases that apply to finance and accounting tasks for you to make your RPA implementation as smooth as possible. 

RPA technology can be deployed in these instances:

• procure to pay actions with invoice processing

• invoice data entry and extraction

• entry and interface

• receipt matching

• accounts payable accrual journal entry...

It is also useful for accounts receivable, including cash applications where RPA is used to process the open receivable with information from the accounting system. From there, it can fetch bank statements and feed them into the accounting system. Finally, it can open vendor invoices and then close them to automate matching payments. Did you know that Upflow works with RPA for generating automated actions to help collecting payments? 

Our solution allows business teams to track and collect unpaid invoices collaboratively. It helps automate repetitive manual processes that are typically done in back-offices by humans: pull the list of customers owing money, filtering the riskier profiles, sending reminders, etc. Our goal is to streamline processes so that financial teams regain control over their receivables.

1. Increased efficiency and productivity

Over repetitive tasks that do not need much pondering once the process has been automated, bots have the advantage over humans because they never get tired. They work faster and more accurately than employees. They can operate at a steady pace all day, every day, without issues. They are great assets to save time on specific tasks and dedicate it to high-value tasks instead. Take this example from the web development company Clarion Technology: they estimated that actions that would take up to two hours like opening 60 mails, copy-pasting their content, copy-pasting 60 sender addresses, and analyzing the emails and their marketing status would only take 8 minutes with RPA automation solutions. 

2. Better accuracy and security

As long as the accounting automated processes are properly mapped and optimized, RPA platforms will drastically decrease human error and improve data security. This also limits the risk of information leaks from one platform to another while executing tasks.

3. Higher job satisfaction

The goal of RPAs is not to take people’s jobs. They aim to allow everyone to work smarter, not harder. When freed from repetitive, dull tasks, employees can showcase their analytical skills, explore new sides of their job, and feel irreplaceable and unique. They can also focus on customer care and hone their skills.

4. More precise analytics

Robot process automation technologies provide a lot of data on the tasks they execute. This data allows for process improvement, better streamlining of business processes, and better decision-making to enhance efficiency.

5. Scalability and agility

RPAs ensure the smooth functioning of some core tasks of your business, even during crisis time (let’s say, during a pandemic, for example). They are easy to configure because they don't revolutionize IT infrastructures or cause disruption in the business (because their core technology program is not altered). Of course, some complex tasks such as analyzing the data or adding several steps to an automation require programming skills. But to get started, RPA does not need programming knowledge! You can use RPA tools from UIPath, Blue Prism, and Automation anywhere to record tasks without any coding. RPA software is usually intuitive and designed for regular users to use. At Upflow, we understand that finance and accounting teams do not have a lot of time to learn new systems. That is why we create a solution that integrates very quickly with existing invoicing solutions.

What are the drawbacks of RPA in finance & accounting? 

One of the advantages of Robot Process Automation is also one of its drawbacks: its lack of complexity. RPAs cannot make decisions on their own unless they are supplemented with artificial intelligence (AI) or simply by a human. They won’t be able to analyze which supplier is the most cost-effective to reorder from them, for example. If the data is not electronic (a paper-based letter, an invoice that has been scanned but processed as an image and not a readable text), RPAs cannot read them and thus not process them because these types of inputs are not structured. RPA models work great with structured data, so it would be best to explore more about the difference between structured and unstructured data. The same issue might occur if supplier invoices or purchase orders are received in different formats, with different fields or fields placed in different document zones. One could say contracts, audio-recorded customer interactions, and physical paper copies are the enemies of RPAs. 

These software robots are limited, as they can only emulate simple, repetitive, high-volume human actions. They don’t have brains of their own - and that is not their point! To the companies afraid of implementing automated processes, think about this: RPAs are not a threat to your workers but help them feel more satisfied in their job. They save them time and energy. With that comes better productivity, reduced human errors, and more efficient workflows: all of which lead to better returns on investment for your company, as well as better employee engagement. 

Finance departments and accounting jobs have an opportunity to transform into high-value advisory roles. They can grow outside of the data-gathering, book-keeping box. Automation allows judgment and consulting skills to take the front row and make FP&A people valuable business partners and competitive employees. RPA also enables better cycle times and higher accuracy, which is essential for end-of-month reporting and financial close.

RPA is, of course, not the only tool you can use to automate processes in your business and improve forecasting. Optical character recognition (OCR), AI, machine learning, and QR code generators are some tools that leading CFOs should explore to streamline their finance processes.