Robotic Process Automation in Finance and Accounting

May 29, 2024
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Banks and financial institutions deal with countless customers and transactions on a daily basis. The high volume of work and processes can easily become overwhelming, time-consuming, and costly in terms of the rate of potential error. To overcome these challenges, robotic process automation in finance and accounting can completely transform how you get work done.

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Here, we will take a look at all the benefits of RPA in finance, as well as the future of RPA in banking.

Key Takeaways

  • RPA is a technology that automates repetitive, rule-based tasks by mimicking human actions and interactions with software applications. It can help finance and accounting teams to improve efficiency, accuracy, compliance, and customer satisfaction.
  • RPA can be applied to various finance and accounting processes, such as invoice processing, reconciliation, reporting, budgeting, forecasting, and tax compliance. It can also integrate with other technologies, such as AI, OCR, and ERP systems, to enhance its capabilities and outcomes.
  • RPA can deliver significant benefits to finance and accounting teams, such as reducing operational costs, increasing productivity, enhancing data quality, minimizing errors and risks, and freeing up time for value-added activities and strategic decision making.
  • RPA can be implemented in a fast and scalable way, with minimal IT involvement and disruption to existing systems and workflows. It can also be easily modified and updated to adapt to changing business needs and regulations.

Coming Up

1. What is RPA?

2. What is Robotic Accounting?

3. Why Should Finance Invest in RPA Tools?

4. Why do Enterprises need Accounting Automation with Robotic Process Automation?

5. What are the Benefits of RPA in Finance and Accounting?

6. How can Robotic Process Automation Accounting Benefit Enterprise Companies?

7. How is RPA used in Finance and Accounting?

8. How to Implement RPA in Finance and Accounting?

9. Wrap Up

What is RPA?

RPA stands for robotic process automation. Robotic process automation refers to the software technology (bots) that are able to mimic human behavior and actions to complete tasks. Robotic process automation can work alongside legacy systems and on top of web and desktop applications in order to carry out business processes.

Robotic process automation can be deployed to handle tasks that deal with structured data. Since the software must be coded or recorded to follow the actions that a human would otherwise have to take, it is best utilised for rules-based, simple, and repetitive tasks.

What is Robotic Accounting?

Robotic accounting works by using programmable bots to execute financial tasks that tend to be time-consuming, data-heavy, and tedious. 

You can think of it much like Excel and its functions work. A user defines the function, and then gets to step away as the computer does the work. 

However, when it comes to an Excel Macro, that is confined within Excel only. Robotic accounting connects with your existing systems, including accounting software and ERPs, to fulfill tasks. 

Why Should Finance Invest in RPA Tools?

For finance teams, the bread and butter of the business occurs with many transactions, a lot of data, and the necessity to pay attention to details. All of this manual work can become too much for a team that must remain error-free, agile and responsive to changing regulations and customer demands.

Instead of having to do everything manually, finance can invest in robotic process automation in finance and accounting for relatively low costs and high returns. Since most processes within the industry are time-sensitive and repetitive, it’s simple to code a RPA solution to execute the processes on repeat. All the while, your team saves time, the business saves money, and everyone gains from more accurately completed work.

Why do Enterprises need Accounting Automation with Robotic Process Automation?

Robotic process automation in finance and accounting helps businesses of every size to get more done with less resources. By using RPA, companies are able to:

1. Achieve Digital Transformation

RPA is often the first step taken to achieve digital transformation within a business. This is because it offers a good starting point, is easy to implement, and provides immediate ROI that helps companies understand the benefit of deploying technologies. 

RPA can be utilized to digitize invoices, streamline workflows, and automate entire accounting processes. 

2. Adhere to Regulations

RPA removes manual errors from simple and complex processes, which helps protect compliance and adhere to regulatory standards. RPA bots can also deliver audit trails so if an external or internal auditor wishes to review what has been done, it’s simple to do. 

3. Improve Vendor Relationships

RPA can be used for invoice processing, so vendors gain transparency and are paid on time/can pay their invoices on time. This improves vendor relationships and service delivery because it removes bottlenecks, delays, and key person dependencies. 

4. Cut Labor Costs

Since RPA augments human capabilities, you no longer have to expect your financial professionals to work overtime and on weekends. 

Not only does this save on labor costs and reduce any threat of labor shortages, but it also improves employee satisfaction because they aren’t bogged down conducting repetitive and data-heavy tasks. 

What are the Benefits of RPA in Finance and Accounting?

You’ll be hard pressed to find an industry that benefits more from robotic process automation than finance and accounting. With the highly transactional nature of the business, the benefits of robotic process automation in finance and accounting include:

1. Scalability

When transaction volume reaches a certain threshold, you may find yourself having to hire a new team member to help manage the workload. This is not the case with RPA. When the workload increases, the bot’s output can scale as needed.

2. Innovation

With the ability to pull legacy data and new data from existing systems, RPA can help to automate data analytics and provide deeper insights to make the best business decisions.

3. Efficiency

Repetitive tasks take time. With RPA, you can greatly reduce the time it takes for your team to get necessary work done so that they can instead focus on high-level and strategic initiatives.

4. Compliance

Finance and accounting require utmost attention to detail in order to remain compliant. WIth one single misstep, your organisation can suffer great financial upsets. With RPA software, you automatically increase your team’s accuracy by reducing potential human errors.

How can Robotic Process Automation Accounting Benefit Enterprise Companies?

Robotic process automation in finance and accounting is straightforward to implement and use. As a result, enterprise companies are able to streamline workflows, shorten cycle times, and improve accuracy. 

Here are some of the key advantages:

1. Lower Costs

RPA can work through data at a rapid pace without sacrificing accuracy, so your human workforce can allocate their efforts toward high-value responsibilities that require human thought. RPA helps to cut costs and improve productivity. 

2. No Downtime

Robotic accounting doesn’t have to take time off or clock-out. It can work around the clock, which means that more can get done. At the same time, it works without mistakes, so you also save time on having to remedy any errors. 

3. Quick Installation

Many companies are reluctant to deploy new technologies in fear that it will take too much time, cost too much money, and be too difficult to adopt. Robotic process automation is easy to install, often taking less than a week to be up-and-running. 

Before getting started, it’s important to consider the options and determine whether you want an RPA tool or a finance automation suite with more robust capabilities (that is also easy to set up). 

How is RPA used in Finance and Accounting?

There are a myriad of use cases for robotic process automation in finance and accounting. From managing processes to handling data, RPA will save your business time and lower the chance of errors once implemented.

To give you a better idea of how RPA can help your business, let’s take a look at some of the common use cases.

1. Accounts Receivable

Properly managing accounts receivable is directly related to cash flow, so it’s of utmost importance. Accounting teams spend a lot of time within disparate systems filling in information and tracking payments.

There’s also a high margin for error if a single record is entered incorrectly, which will affect payment. As such, robotic process automation can be utilised to automate the creation, sending, and tracking of invoice payments.

The sooner a customer receives an invoice, the sooner they can pay, which can greatly reduce any late payments.

2. Accounts Payable

Accounts payable, like accounts receivable, is a key repetitive function of accounting teams. However, unlike accounts receivable, accounts payable require that vendor invoices be checked with purchasing orders before payments are made.

Again, this translates into a time-consuming and data-heavy process. But, not when robotic process automation is deployed. RPA automatically distributes incoming invoices to the necessary recipient and can aid in preventing late payments by scheduling reminders.

RPA can also easily cross-check purchasing orders with invoices to make sure that everything is lined up.

3. Client Onboarding

The Know Your Customer regulations maintain that financial institutions perform due diligence before onboarding new customers. This can turn into a draining exercise that cannibalizes their valuable time.

Instead of spending time combing through various systems to collect information, RPA bots can be deployed to do this work in much less time. Once data is collected by the bots, they can send a detailed report to the compliance manager or person in charge to review and approve onboarding. If a new customer is approved, then the bot can also transfer all the relevant information into the CRM or customer profile.

4. Financial Statements and Financial Close

By using RPA, your finance department can easily prepare up-to-date financial statements, even on a daily basis. With the most updated financial information, your business leaders are equipped to make the most informed decisions and act in an agile manner.

Additionally, at the end of each month, it’s necessary to procure accurate financial statements to finalise the financial close to move into the next period. By using RPA, the process that can take weeks to finalise can take just a few minutes.

5. Financial Planning and Forecasting

Financial statements and data must be properly input and unkempt in order to accurately predict the future. With the use of bots, your data will be properly collected, transformed, and stored for the purpose of forecasting.

By utilising historical data across departments, automation solutions can put together a complete picture of what you can expect the future to hold. With this information, you can create a financial forecast and then also benefit from conducting variance analysis seamlessly.

6. Travel and Expense Processing

When your employees travel for business, they expect to be reimbursed within a reasonable amount of time. As travel picks back up again, the number of expense reports will also increase.

As such, your accounting department will be bogged down with comparing receipts and expense reports before approving payouts. Instead, you can deploy robotic process automation to manage this process.

Software robots can simply take the submitted data, compare them to the internal policy, and update the accounting team as to whether or not the expense reports are in line with reimbursement policies or not.

7. Account Reconciliations

No matter how big or small your organisation is, account reconciliations are inevitable. The process of comparing internal account balances to external statements is necessary to ensure that your organisation’s financial reports are actually reflecting reality.

Account reconciliation is not only time-consuming in terms of collecting and comparing data, but it also takes time to receive approvals and can fall by the wayside with bottlenecks. RPA solves all the issues associated with any type of account reconciliation you may need to perform, including intercompany reconciliations.

You can trust the software to quickly compare records, prompt a responsible human party should an anomaly arise, and even be able to spot fraudulent charges early enough to resolve any issues before they grow too big to handle.

8. Data Management

It’s likely that your organisation operates with data in various systems. RPA automation can help to move and transform data across systems in order to execute processes, conduct analyses, and generate valuable reports.

Data is a paramount asset within businesses, but when it is separated and hard to access, then it proves useless. With RPA software, you can take advantage of all the types of data you’ve been collecting to better answer questions, make decisions, and service your customers.

How to Implement RPA in Finance and Accounting?

RPA is a great gateway into automation. This is because there are software solutions that can work straight out of the box and begin providing ROI almost immediately.

To get started on your RPA journey, consider following these steps:

Identify Processes

First, make a list of all the manual business processes that your team spends time on. List them in order of complexity. And remember, RPA is best suited for repetitive, high-volume, and finite processes.

Document Requirements

Take an objective look at the processes listed above. If there are any improvements that can reduce waste, then make note of them. Additionally, document the steps involved as well as the relevant parties so that when you deploy RPA, everyone can be on board.

Prepare the Data

RPA relies on accurate and structured data to execute processes properly. Try to consolidate data into a centralised location if possible. If not, be sure that you know exactly where data must be pulled from in order for the RPA solution to do its job.

Design the Process

Define the steps of the process and the intended end goal. Establish stop points in which your team can review the work and verify that all is working smoothly.

Test the Output

Before deploying RPA on a broad scale, start with a small test. With this test, you will be able to realise whether or not your data is complete and accurately provided to the RPA system. Involve all team members who are usually part of the process so that they can provide feedback as to whether or not everything is running as you’d have hoped. If all looks good, then you can continue to expand your usage of the RPA solution.

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Wrap Up

The future of RPA in banking is only going to continue to grow as organisations realise financial transformation. According to Deloitte’s Global RPA Survey, 78% of businesses that have already implemented RPA will continue to grow their investment over the next three years. Ernst & Young reports that RPA can help financial services realize cost savings between 20%-60% of baseline FTE costs.

By reducing costs, increasing accuracy, and fulfilling business processes in less time, finance and accounting departments are able to radically transform how they conduct their day-to-day responsibilities.

With robotic process automation in finance and accounting, professionals in these departments are able to allocate more of their time to high-value, strategic, and advisory roles to help organisations remain competitive, innovative, and profitable. For help choosing the best RPA tool for your business, check out this guide.

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What is robotic process automation in finance and accounting?

Robotic process automation (RPA) in finance and accounting is the use of software robots to automate repetitive, rule-based tasks such as data entry, reconciliation, reporting, and analysis. RPA can help finance and accounting teams to reduce errors, save time, and improve efficiency.

What are the benefits of robotic process automation in finance and accounting?

Some of the benefits of RPA in finance and accounting are:

  • Faster and more accurate data processing and reporting
  • Lower operational costs and improved productivity
  • Enhanced compliance and auditability
  • Better decision making and strategic insights
  • Increased customer satisfaction and loyalty

What are the challenges of implementing robotic process automation in finance and accounting?

Some of the challenges of implementing RPA in finance and accounting are:

  • Choosing the right processes and software for automation
  • Managing the change and resistance from staff and stakeholders
  • Ensuring the quality and security of the data and processes
  • Maintaining and updating the robots and workflows
  • Scaling and integrating the automation across the organization

How to choose the best robotic process automation software for finance and accounting?

To choose the best RPA software for finance and accounting, you should consider the following factors:

  • The complexity and frequency of the processes you want to automate
  • The compatibility and connectivity of the software with your existing systems and data sources
  • The ease of use and learning curve of the software for your staff and users
  • The functionality and flexibility of the software to handle different scenarios and exceptions
  • The cost and return on investment of the software for your budget and goals

What are the best practices for robotic process automation in finance and accounting?

Some of the best practices for RPA in finance and accounting are:

  • Define and document your processes and objectives clearly and accurately
  • Test and validate your robots and workflows before deploying them
  • Monitor and measure the performance and outcomes of your automation
  • Communicate and collaborate with your staff and stakeholders throughout the automation journey
  • Continuously review and improve your automation to adapt to changing needs and opportunities

How to measure the return on investment of robotic process automation in finance and accounting?

To measure the return on investment of RPA in finance and accounting, you should use a combination of quantitative and qualitative metrics.

Some of the common metrics are:

  • Time saved and efficiency gained
  • Error rate and quality improved
  • Cost reduced and revenue increased
  • Compliance and auditability enhanced
  • Customer and employee satisfaction and retention improved

One software that can help you achieve these benefits and overcome these challenges is SolveXia.

SolveXia is a complementary tool to RPA that can help you derive more value from your data by transforming it into visual reports and dashboards. While RPA interacts directly with your IT systems to automate tasks, SolveXia ingests data from various systems and can transform it into visual reports and dashboards. 

SolveXia is also used to help companies derive more value from their data (e.g. better insights, more granular or frequent analytics).

SolveXia is a leading no-code automation platform used by finance teams to streamline financial close, reconciliations, analysis and more.

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