Traditionally, many accounting processes are time-consuming and prone to human error. As companies implement digital transformation, recent statistics indicate that accounting professionals are embracing robotic process automation (RPA). Almost 50% of accountants desire a migration to automated processes. Of those who have already made the switch, nearly 60% say it improves productivity and efficiency.
Why would an accounting department need RPA? What are the benefits of implementing RPA? What challenges might be faced, and how can they be overcome?
Why Robotic Process Automation Is Needed
Accounting departments gather and process data in various forms, but several factors can cause a bottleneck in production, accuracy, and efficiency.
Bottlenecks can be caused by:
- Massive backlogs
- Human errors
- Inexperienced or untrained staff
Specific manual processes, such as invoice processing, can be incredibly time-consuming and inefficient. As an example, consider accounts payable and accounts receivable. Invoices and email communications are produced by competing platforms and received from various companies in countless formats, and none of this data gathering is digitized. An organization may rely entirely on staff members to collect, sift, integrate, and reconcile all this information into their own system(s), generating and distributing reports manually.
RPA would automate and streamline this process.
How to Implement RPA
The first step is identifying which process(es) can benefit from RPA and why.
Rather than having your IT department make this decision, it’s best to have each department identify which process(es) they would like to automate, specifying what they would like to have automated and what would work best for their department. The advantages of this approach include:
- Departmental control of the automation
- Consistency across the department
- Departmental efficiency and reliability
- Standardization of departmental processes
IT would then only be required to handle setup, manage the automation and provide security controls. A word of caution, though: consider how effective your existing processes and software systems really are first. Why automate something prone to bugs and issues? To ensure an overall effective strategy, you may also consider replacing a faulty process or platform before automating.
Benefits of RPA
One of the most attractive benefits of RPA for accounting is its cost-effectiveness, but numerous other benefits can be divided into five main areas.
Applications programmed to do a specific task called “bots” collect, process, and analyze data faster. They are better able to spot patterns and discern their significance too. Because RPA can integrate with various systems and merge data and results quickly, automation helps staff members to achieve increased productivity efficiently. For instance, employees who were previously responsible for bookkeeping activities can now assist sales managers in preparing more precise predictions for the future. Automation improves employee morale, minimizing or even ending the complaints that often cause undue stress and increase employee turnover.
Reduction of Human Error
Human error is a reality, especially when dealing with numbers. Fatigue, inexperience, or inadequate training can exponentially increase the likelihood of error. Automation of processes can minimize or even cut the risk of human error. Accurate financial data allows for more precise decision-making. Furthermore, you can better ensure that your organization remains tax compliant, which is crucial to avoiding unnecessary probes and penalties by the IRS.
Standardization and Improvement of Processes
RPA can integrate and reconcile the data from various systems, meaning that automation actually standardizes an organization’s processes. In addition, during the identification of functions that can be automated, improvements are often uncovered and designed as part of the solution. From procurement to payroll, expense processing, cash collection, and more, automated processes make way for new, more efficient workflows and reduce the time employees spend on repetitive tasks.
Because RPA can combine data gathered from various sources and systems, reports, spreadsheets, dashboards, and other means to display results are distributed efficiently with increased visibility. Cloud computing means employees can create, edit, and save documents in real-time. Mobile apps for smart devices allow 24/7 access to financial statements and invoices, resulting in better decision-making and follow-through.
Flexibility and Scalability
Rather than investing considerable resources in hiring, equipping, and training staff as an organization grows, investment into RPA helps an organization adapt and grow efficiently. New interdepartmental collaborations allow for better production planning and marketing budget allocation. As the overall productivity of teams and the company increases, RPA capabilities easily mold to fit changing needs.
Reaping the Benefits
RPA is a non-invasive solution with a low technical barrier. eCapital Advisors can provide you with the professional consultation, strategy, and implementation of RPA your accounting department needs. Explore our advisory services, and schedule a consultation appointment today.