Oct. 18, 2021

The Role of RPA in Finance and Accounting

As financial and accounting functions grow more and more competitive each day, companies should take advantage of the latest technological advancements to keep up in the game.

The application of Robotic Process Automation or RPA in finance and accounting is one viable option to keep abreast and secure a spot in the extremely competitive financial and accounting industry.

Implementing RPA in finance and accounting services enables companies to optimize workflow efficiency by automating tedious tasks, allowing the limited workforce to devote more of their time to high-value tasks. RPA in finance and accounting is a practical solution for companies to keep up with the competitive banking industry by digitally transforming themselves to economize, enhance and streamline business processes, and provide better customer service among their stakeholders.

Benefits of RPA in Finance and Accounting

With the integration of RPA in finance and accounting, banks can reap the following benefits:

RPA in Accounts Receivables

Accounts Receivables directly impact the cash flow. Thus, it is important to manage it efficiently. Contrarily, mishandling this vital accounting task can later result in unwanted cash gaps. Hence, Accounts Receivables must get monitored thoroughly to avoid cash gaps and generally ensure that the company is in good financial standing.

Although relatively simple, manual accounts receivables can be tedious and time-consuming as all the information must be input manually, all while simultaneously attending to other tasks. Additionally, businesses cannot eliminate the chances of error. RPA in finance and accounting, particularly in Accounts Receivables, automates the process and removes human error potential while the PI is getting drafted.

Another pressing challenge in conducting Accounts Receivables is managing the Days Sales Outstanding or DSO at a low level. DSO is the estimated time it takes to collect payment. Since DSO is highly dependent on human factors on both the payee and recipient’s sides, integrating RPA in finance and accounting to automate Accounts Receivables eliminates the chances of error by automatically emailing invoices to clients that they can get paid faster. Automating the sending and receiving of invoices also prevents the delay in payment.

Suppose the company is still hesitant to apply RPA in finance and accounting. In that case, the Accounts Receivables is a good starting point to try out automation as it is generally less dependent on external documents, unlike Accounts Payable.

More specifically, the following are the benefits of implementing RPA in finance and accounting, particularly in Accounts Receivables automation:

● Sales Quotation Generation

● Easy Invoice Distribution

● Customer Credit Monitoring

● Follow-Ups

RPA in Accounts Payable

A more intensive task in managing an accounting department is the processing of Accounts Payable (AP). In Accounts Payable, the high influx of vendor invoices is non-standard and needs to get cross-checked with the purchasing order, contrary to Accounts Receivables.

By applying RPA in finance and accounting, businesses can simplify the management of Accounts Payables. These invoices can automatically direct the team responsible for their approval. Additionally, deadline reminders can also be set and delivered periodically. RPA bots can automatically link the purchase order with the appropriate invoice, compare them, and mark any mismatches for review.

More specifically, RPA in finance and accounting ease the management of Accounts Payables through:

● Vendor Invoices Processing

● Cross-Checking Invoices with the Purchasing Order

● Managing Payments

● Responding to Vendor Inquiries

RPA in Purchase Order Processing

Implementing RPA in finance and accounting, particularly in the procurement process, procurement teams can accomplish the entire process from filing a purchase request to raising a purchase order within a short time. Specifically, RPA bots automatically follow a particular workflow, such as assessing the request, seeking approval from concerned personnel, and raising the request to a PO, as soon as a purchase request gets submitted.

Intercompany Reconciliations

By the end of each reporting period, the accounting department must close the records for the month to balance the accounts and present an accurate and truthful financial statement to stay in check and prevent future issues that might arise. This process is among the most intensive tasks that can even paralyze the entire accounting department’s workflow.

However, with RPA in finance and accounting, the number-crunching tasks can be assigned to RPA bots, whereas teams can mainly focus on doing actual analytical work. An RPA bot can examine several orders and transactional data from multiple sources, approving all matching orders and flagging any mismatches or discrepancies.

RPA in finance and accounting can also simplify bank reconciliations, enabling users to download bank statements, link them to their accounts, check and validate balance and transactions, and create journal entries, among other things.

More specifically, RPA in finance and accounting simplify bank reconciliations by:

● Downloading data from various sources, uploading it to internal systems, and presenting it in a pre-approved format.

● Creating a bank statement download workflow for user accounts.

● Validating balance and transactions and connecting them to user accounts.

● Creating and balancing journal entries.

● Notifying about any mismatches or discrepancies.

As the banking industry grows more competitive each day, it only fits that financial and accounting companies find ways to keep up and stay afloat of the competition. By integrating RPA in finance and accounting, they can do just that.