A new wave of robotisation is driving innovation in finance and accounting, an industry that before automation was characterised by increasingly complex operations carried out by financial and accounting specialists.
Software robots now perform different tasks in firms that have adopted them, from account reconciliation to intercompany transactions, auditing expenses and managing vendor invoices and payments, recording journal entries, fixed-asset accounting and to maintain account data and perform strategic data analysis.
Robotic process automation (RPA) is particularly useful and easily adopted in accounts payable across a company’s procure-to-pay cycle, where processes such as vendor master data management and invoice processing allow for a greater degree of automation.
Some other processes that require the analysis of vendor metadata or strategic analysis are better suited to having trained staff analyse data after it has been collated and sieved into useful formats by robots.
Despite naysayers, the growing trend for RPA is unlikely to replace a majority of finance and accounting jobs industry analysists say, since it will likely see accountants and finance specialists play a more strategic part in a company’s planning and financial analysis.
A/C processes have been traditionally performed by employees working to complete repetitive, time-consuming tasks. But now most of these tasks can be automated, freeing up staff to focus on broader strategic financial analysis.
RPA software can be set up to work across the different processes in the procure-to-pay cycle where it functions like a virtual back-end processing centre. It can interact with documents, databases and ERP systems using specific logins.
Software robots link applications on an internal and external level. File systems, databases and application programming interfaces (APIs) are automated by robots, without the need of full system integration.
The benefits of the implementation are manifold. The robots areextremely accurate, make no data errors and don’t overlook steps. Robots perform these repetitive tasks faster and more efficiently than humans and can easily be scaled up and down to meet the needs and demands of the business.
As well as being highly scalable, software robots are compliance friendly since they create audit trails and logs needed for regulatory compliance as they work.
Processes such as error reconciliation and account closure become more expedient and almost entirely free from errors with RPA.
Discrepancies in vendor contact information in invoices or purchase orders and purchase order amounts can be more rapidly dealt with, therefore eliminating the need for costly oversight and exception handling.
This automation can be combined with configurable workflow and data extraction solutions for speedy approval, to implement data structure and to optimise vendor discount management.
Robotic software has been especially beneficial for A/P processes where invoice processing is required. This is due mostly to recent advances in RPA technologies that can read and interpret unstandardised invoices and make sense of unstructured data – something previous software has been unable to achieve.
Invoice processing commonly requires the data entry of indexed invoice data into ERP or legacy systems so that there is matching of the Goods Received Note (GRN), invoice and Purchase Order (PO). But these laborious tasks can now be easily automated with RPA.
Firms can implement robots to manage incoming vendor invoices, to produce expense reports and even to process vendor payments and handle disputes or claims.
The key software technologies in RPA software produced by companies such as UiPath and Blue Prism that makes this possible are optical character recognition (ORC) and Intelligent Character Recognition (ICR).
Software with OCR can distinguish differences in text, such as how A is different to B, when users are operating in remote applications and databases like Citrix. ICR helps robots recognise images like buttons and data fields picking out specific information and collating and processing it into useful information.
Staff can train robots by ‘do as I do’ point and click configuration at the user interface level. By mimicking user employee actions, RPA software can be deployed to manipulate and transfer application system data quickly and accurately.
Of course, adoption of RPA is not without its challenges. One of the biggest challenges to RPA in an organisation is lack of standardisation in invoicing and documentation that can make it difficult to crosscheck and match vendor invoice data to PO. Unstructured data causes similar problems.
Organisations need to adopt technologies that can assist collection of data as it is inputted so that it can be standardised. One way is to leverage the ORC technologies for proto invoicing – whereby identified patterns in the data fields of invoices are used to generate invoices automatically.
Process inefficiencies can affect the effectiveness of software robots, highlighting the importance of organisations to streamline these processes. Examples of process inefficiencies include missing vendor codes and manual approval processes that can lead to delays. Effective process discipline is vital in a manual setup, since AP processes greatly depend on the staff’s training and skillset.
In Australia, vendor agnostic sourcing and management advisory services company, Minefields, released a report into RPA in the Australian financial services sector. The report estimated a 30 per cent cost savings to Australian adoptees of RPA.
Minefields surveyed leading service providers in Australia about their plans to adopt RPA. A huge 90 per cent said they were committed to adopt the technology in the future.
Already senior business managers have been fast adopters, eager to ride the wave of innovation. Big players Telstra, ANZ, Westpac and AMP have implemented some form of RPA into their business.
Will RPA reduce finance sector jobs? The term ‘jobpocalypse’ has been used to describe possible widespread job losses in the industry due to RPA. But industry experts remain optimistic about jobs.
The Mindfields report cites a 20 per cent reduction in staff numbers in businesses that have adopted RPA, not a significant figure. But the report also states it is highly likely that the market will continue to evolve and new job opportunities will emerge, particularly in key areas such as cloud, big data and advanced visualisation.
To prepare your accounts payable for RPA ensure you standardise your invoices as much as possible by ensuring invoices are of a similar format. Also, reduce inconsistent and unstructured data across the lifecycle of your business from generation of invoice receipt to approval. Most importantly, eliminate process inefficiencies by reducing manual approval processes and ensuring effective process discipline across your business sectors.