Automating Finance & Accounting Process via Robotic Process Automation (RPA)
Introduction to RPA Technology:
RPA is a technology that enables a robot—the digital worker or a ‘bot’—to execute processes by emulating human interaction with computer applications through the User Interface.
In 1959, Arthur Samuel developed Machine Learning (ML), which is one of the most important technologies that eventually led to the creation of RPA. ML allowed computers to perform several critical tasks, such as translation & text summarization, etc.
RPA was first coined in the year 2000, however, the foundational technologies on which RPA was built have been around for decades. The foundational technology on which RPA is based are:
- Screen Scraping;
- Workflow Automation;
- Artificial Intelligence.
The capability of RPA Technology:
RPA has the ability to:
- Interact with other systems via Screen scraping or API Integration or OCI;
- Ability to determine actions based on inputs it gathered from other systems;
- Ability to Report.
RPA in Finance & Accounting Process:
Mckinsey & Company conducted a detailed analysis of finance & accounting processes & automation software capability, it found that the capability of automation tools that existed in 2018 could “fully automate 42% of finance activities & mostly automate a further 19%”.
A summary of finance and accounting tasks evaluated in this study is combined with other common finance & accounting activities to present the relative complexity of the process areas & their relative likelihood of being automated in Figure 1.
Mckinsey’s findings as per Figure 1, of the greatest impact, are tasks performed by entry-level finance & accounting staff & finance & accounting shared service centers. Other examples of financial accounting staffing processes not listed in Figure 1 that typically make good RPA candidates include:
- Bookkeeping.
- Payroll.
- Data Migration & data entry.
- Daily profit & loss reporting.
- Control testing.
Since these processes are mainly rule-based & repetitive in nature with standard input & output report formats & detailed documentation in place.
RPA Implementation
Deloitte conducted a study on RPA, attracting responses from more than 400 organizations globally. 53% of respondents had already begun their RPA journeys & 19% intended to begin within the next two years. Yet only 3% of these organizations had scaled their digital workforce beyond 50 bots.
Gartner found that this low scaling rate in spite of wide-reaching applicability of RPA technology, affordability of licenses, and low barrier to entry for implementation was mainly due to, “organizations found underestimate the complexity of RPA initiatives”. read more-
Challenges in RPA Implementation:
- Misalignment of RPA program goals to company or department strategic goals.
- Underestimating the complexity of the disparate nature of existing processes.
- Inadequate development and/or training partners.
- Insufficient financial or human resources.
- Automating fragmented processes (automating individual components rather than an end-to-end process where applicable).
- No documented governance for the RPA program.
- Wrong business stakeholders engaged for process selection and solution design.
- The absence of IT buy-in is needed to build appropriate infrastructure and application integration support.
Conclusion:
Automation is here to stay. Although widespread democratization of RPA, the concept of a bot for every employee, may still be far off, digital teammates are already on the payroll services & leadership is assigning them finance & accounting tasks. As RPA vendors strengthen their native offerings & progress with integrating technology partnerships, the complexity of the processes digital teammates can perform with intelligent RPA will undoubtedly increase.
To become more efficient, eliminate mundane tasks, and holistically transform the finance and accounting function, many CFOs are already looking to RPA as a solution that also exposes staff to digital tools, reduces cost, and paves the way for other technologies.
As businesses demand more, CFO services who do not act will find themselves leading overpriced, overworked teams without the bandwidth or skill set to operate in an agile manner or deliver elevated analytics supporting real-time business decisions.
Thus, finance & accounting teams who have not yet embraced RPA risk of becoming obsolete or uncompetitive, thus the finance & accounting teams across the country should embark to brace themselves the power of the transformation in order to unleash the power of automation in Finance & Accounting processes.
