Robotic Process Automation (RPA) is a technology where robots execute processes leading to enhanced productivity, reduced costs, and streamlined compliance.
RPA is evolving and its adoption is rapidly increasing. When it comes to the finance functions, Gartner reports that 50% of controllers have either implemented RPA or are in operational mode. Furthermore, it also predicts that the number will increase to 88% in the next two years!
RPA is an integral part of Digital Transformation across various functions without an enterprise. Robots executing the tasks doesn’t mean they will replace humans. It is said that “Robotics Process Automation (RPA) will help humans become more human at work.” It means that robots take away the tasks that don’t add value out of the hands of people and automate those, allowing them to focus on more valuable and rewarding work.
Let’s understand the various uses of RPA in the finance industry.
How is RPA Transforming the Finance Industry?
Over the past few years, finance professionals have been overwhelmed with the increased repetitive work, transactional volume, and massive data management. Implementing Robotic Process Automation to automate mundane tasks can help them enhance productivity and increase revenue.
- Budget Planning and Forecasting. To ensure profitability and growth, finance teams need to meticulously and consistently plan cash flows and do accurate budget planning. They need access to real-time insights into the financial performance of the organization, revenue projections, market data, load balances, and other such comprehensive information. Business stakeholders and leaders need this information in a format that is easy to comprehend. RPA can automate the trend analysis and make the market trend lines and visualized data available without the need for any specialists, leading to faster decision-making.
- Invoice Processing: RPA can automate the management of accounts payable and receivable that include repetitive tasks. With RPA, invoices can be auto-generated and data from different invoices can be extracted to a centralized space to be merged and reconciled with other process information. All these things can help in accelerating the invoice generation process and avoiding costly errors and penalties in case of late or incomplete payments.
- Accounts Receivables: Accounts receivable involves repetitive and rule-based activities that require consistency, accuracy, and strict adherence to timelines. RPA can help in the automation creation of goods and services bills more reliably and efficiently. With an automated billing process, employees can focus on high-priority tasks, and enhance the payment collection cycles.
- Fraud Detection: With RPA, Financial organizations can easily detect fraud and also predict any future fraudulent activities based on the usage patterns. In case of any fraudulent activities, the stakeholders can get instant notifications and quickly implement the business or regulatory level changes. It helps in reducing risks and prevents organizations from getting impacted because of any fraudulent activities.
- Financial Reporting: Gartner reports that human error in the finance function produces an average of 25,000 hours of avoidable rework. Robotic Process Automation can remove these redundancies and help in generating accurate reports. Additionally, it also contributes to tracking profit and loss to create immaculate reports in real-time. Using RPA, organizations can ensure enhanced transparency and generate more accurate financial forecasts.
- Tax Reporting: The tax reporting process involves multiple tasks such as gathering/validating data, running reports, calculating adjustments, etc. RPA can automate a majority of such tasks by gathering information for tax liability, generating tax basis, creating reports, regularly updating tax return workbooks, and submitting the tax reports to the concerned authorities.
- Intercompany Reconciliations: Manual data entry and cross-checking take up a lot of time for financial professionals when it comes to the creation of accurate financial statements. They also end up spending a lot of time in identifying and recording transactions or invoicing mistakes. Using RPA, organizations can automate the process of checking transactional data from various sources, matching of records, and notifying about discrepancies
- Bank Reconciliations: RPA can be leveraged to automate the bank reconciliation process. It can automatically download the bank statements, reconcile balance and transactions, and update the core systems. RPA bots can quickly identify mismatches and discrepancies. With higher accuracy and better matching of records, companies can save a lot of time and resources in reconciliations.
- Journal Entries: RPA can come in handy for creating the journal entries that need to be done on a monthly basis. The bots can be used for making entries in systems like ERP and run validation analytics to ensure the accuracy of the entries.
Finance and accounting are core functions of any business. By implementing RPA, many of the manual, time-consuming, and repetitive tasks can be automated, leading to tremendous cost and time-saving.
The RPA implementation does not have to be a big project with a hefty budget. Companies can start small and experience the benefits before expanding the scope to multiple areas. The question today is not whether to adopt RPA. It is how soon and how well you adopt it.
If you need help in defining your RPA strategy, connect with our RPA experts.