Here’s Why Accountants Can’t Afford to Ignore Robotic Process Automation
The development of Robotic Process Automation (RPA) has sparked debates about how this technology will impact various industries, particularly financial services. In accounting, the question isn’t so much about whether RPA will affect firms, but when. This technology promises to bridge the gap between what accounting firms are currently doing and what they actually want to do. It can also be one of the key ways in which technology can improve client relationships. Accounting firms everywhere are under pressure to speed up their processes, bring down overhead costs and most of all, to increase face-time with their clients.
Can RPA help firms meet these goals?
What is Robotic Process Automation?
Robotic Process Automation is a type of software that combines Artificial Intelligence and machine learning to seamlessly execute tasks formerly performed by humans. In a nutshell, RPA analyses the way a human does certain tasks, ‘learns’ it and then starts doing them on its own. This technology is excellent for high-volume, repetitive tasks and can free up critical time for an accounting firm.
Advantages of RPA in Accounting
Previously, technology in accounting firms was limited to basic calculations and storage of documents. The introduction of RPA, however, will have applications that range far beyond these functions.
1. Streamline approvals process
Processing large volumes of invoices can be a very tedious process. When external vendors send invoices, these documents need to be sent to the concerned parties who then have to approve it. Any inaccuracies or delays in this process can cause complications for accounting firms. Through Robotic Process Automation training, the technology can learn how to perform these tasks and ensure that it runs smoothly. When invoices are received, it can automatically send them to the person responsible for approving it. If the approval matrix is complex, with multiple stages, then RPA can immediately escalate it to the next level once approval has been received from one stage. As there is no room for human errors or delays, using RPA can simplify a firm’s approval cycle by a large extent.
2. Analyse critical data
Creating comprehensive reports about the company’s performance is critical for firms to improve their business processes and operational efficiency. Compiling all the data required and making the report, however, is a time-intensive task that many firms aren’t equipped to handle. RPA can automatically collate and update a firm’s data, allowing them to get real-time reports that can provide deep insights. As the technology gains more data, it will be able to predict outcomes, something known as predictive analysis. Predictive analytics can help firms make better decisions regarding inventory management, revenue generation and more.
3. Automate quote-to-cash
RPA can simplify a firm’s interactions with suppliers to a large extent. For a firm that is looking for external goods and services providers, the first step is usually comparing quotes from different providers. Depending upon the number of vendors, this process can become time-consuming. RPA can automatically compare competing quotes and services offered, and finalise on the best vendor for a firm. Once the vendor has been finalised, RPA can ensure there are no delays in payments or gaps in documents and approvals. Reconciliations between purchase orders and invoices can also be automated, which will improve efficiency of internal processes for a firm. Since late payments often attract heavy fines, implementing RPA can be one of the strategies for accountants to build a profitable practice.
4. Integrate portals
With robotic process automation training, accounting firms can create and integrate portals that can improve visibility between the firm and external parties. Many firms work with service providers that have portals where individuals need to enter data on. Constantly updating the portals can be a time-consuming task, preventing a firm’s employees from allocating time to higher-value tasks. RPA can take over this process, entering values into respective portals. Letting a robot handle this function can also reduce the risks of transposition errors, duplicate entries and more. This improves accuracy of data and can help prevent complications for an accounting firm.
5. Improve productivity
All the advantages of RPA ultimately boil down to one thing: greater operational efficiency. With a robot handling routine tasks, a firm’s employees can reallocate their energy into higher value roles. The key differentiator of accounting firms in the future will be their ability to move into advisory roles and spend more time with clients. Without RPA, the only other way for a firm to do this is to expand their workforce. However, in large cities especially, expanding isn’t an option because of astronomical overhead costs and space restrictions. Leveraging RPA technology can be a cost-effective strategy for accounting firms to take on advanced analytical and consulting roles for their clients. This can help firms build a productive work culture.
Obstacles to adoption of RPA
With robotics in finance and accounting making an entry, questions have naturally arisen over whether RPA could eventually replace outsourcing. While RPA is certainly a groundbreaking concept, it is not without its flaws. When comparing it to outsourcing especially, many of the shortcomings of RPA technology become evident.
1. Cannot process unstructured information
Robotic process automation training can learn repetitive, basic tasks with complete ease. However, it isn’t as adept at interpreting and processing unstructured data. When it comes to emails, for example, RPA might not be very useful. This technology requires data to follow a set format that it can understand. If data isn’t translated into an OCR format, robots will be unable to understand it. This is why; outsourcing still has the upper hand when compared to RPA.
2. Cannot update quickly to new regulations
By its very nature, ‘machine learning’ uses past actions and understand to perform new tasks. If an accounting firm changes its practices or external regulations are modified, RPA will not be able to modify its learnings immediately. Unlike in outsourcing where new changes can be implemented instantly by a human workforce, RPA will require adequate time to re-learn the new processes.
3. Cannot replace human interactions
The intangible quality of a human touch is something that RPA technology can never replicate. Tasks that require voice interactions, advisory capacities and frequent modifications of processes cannot be undertaken by RPA. For these processes, outsourcing will continue to be essential for accounting firms.
Along with blockchain technology, robotics in finance and accounting is undoubtedly one of the most exciting technologies to impact the accounting industry in recent times. While it might not be able to replace outsourcing, it can still be a powerful tool for firms looking to improve their processes.
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