The evolution of technology continuously shapes the world around us, transforming traditional work models and introducing innovations in every sector. When we think of the accounting and finance department, images of desks filled with paperwork and constant manual data entry might be the first to come to mind. However, the reality is entirely different. In the digital age, this sector is witnessing a true revolution, where digital collaborators become key players.
How is modern technology transforming traditional accounting and finance activities into more efficient, accurate, and innovative processes?
Let's begin with a brief definition:
Robotic Process Automation is a technology that allows for the automation of routine, repetitive business tasks using software - a robot that mimics human actions in IT systems.
Which tasks and processes are best to automate?
When deciding to automate certain processes in an organization, it's important to know which ones are most suitable. The following criteria can help guide the selection of processes for automation:
Repetitive processes:
This refers to tasks performed the same way every time. If a process is consistent and doesn't require human judgment, it's ideal for automation. For example, the process of inputting invoice data into a system is repetitive and can be easily automated.
High transaction volume:
Processes that handle large amounts of transactions are prime candidates for automation. For instance, if the finance department is regularly responsible for bank reconciliations and must match hundreds of bank transactions with ledger entries daily, automating this process can be key to improving efficiency.
Standard inputs and outputs:
If input and output data in a process are consistent and easily identifiable, it simplifies the automation process. For the accounting department, a standard invoice format is ideal for automation since the system can easily identify the required data.
Low exception rate:
Processes that rarely encounter non-standard situations or errors are easier to automate. When a process is straightforward and clear, without the need for making complex decisions, the risk of errors is minimal, making it a prime candidate for automation.
Once we understand the key criteria for choosing processes to automate, it's worthwhile to consider which tasks in the finance and accounting departments are most commonly subjected to this transformation. Knowing typical areas to automate can better tailor our approach and strategy to specific needs.
Which financial processes often adopt the assistance of "digital hands"?
Invoice reconciliation:
Automation in the area of invoice reconciliation begins when an invoice enters a company's lifecycle. Digital Assistants can scan and capture invoice data, eliminating manual entry. Systems can then automatically compare this data with corresponding orders or contracts. If the data matches, payment can be initiated without human intervention, speeding up the process and reducing error risks.
Bank account reconciliation:
Reconciliation, the process of comparing bank transactions with ledger entries, can be time-consuming and prone to errors when done manually. Automating this process allows for almost instantaneous data comparison, highlighting discrepancies and enabling swift corrections.
Financial report generation:
Thanks to automation, generating reports that once took days or even weeks can now be completed in hours or minutes. Systems can gather data from various sources, process it, and present it in a clear format tailored to an organization's needs.
Management of receivables and payables:
Instead of relying on humans to monitor payments and send reminders, Digital Assistants can track these payments in real time. If a payment is delayed, the system automatically sends a reminder, aiding in maintaining financial liquidity.
Payroll processing:
Calculating employee salaries, especially in large organizations, can be complex. Automating this process takes into account various factors - from basic hourly rates, bonuses to overtime - and calculates the due salary precisely. Moreover, systems can also factor in elements like taxes, social insurance, or additional benefits, ensuring each employee receives exactly what they should.
Budgeting and forecasting:
In the finance and accounting department, accurate budgeting and forecasting are crucial. Traditionally, these processes required data gathering from multiple sources, which was time-consuming and error-prone. With RPA, data collection can be automated, significantly shortening the analysis time. Robots can also perform ongoing financial fluctuation analysis compared to set budgets and forecasts, allowing for quicker adjustments to changing market conditions.
Tax management:
The finance and accounting department is responsible for correct and timely tax filings. Using RPA in this area allows for the automatic gathering of all necessary documents and information, as well as their verification for consistency and compliance with current regulations. Additionally, robots can be programmed to monitor changes in tax laws, facilitating adjustments to new requirements and minimizing error risks.
Fixed Asset Management
Durable fixed assets, such as buildings, machinery, equipment, or computer hardware, require regular checks and monitoring of technical reviews. RPA can automatically monitor these assets, recording all income and expenses of the property components and also verify the appropriateness of applied depreciation rates with their usage period. Robots can also conduct regular asset value reviews, which helps in more accurate estimation of their value and forecasting future investments.
Cost analysis:
In today's competitive business environment, companies need to thoroughly analyze and control their costs. Traditional analysis methods often took time and lacked precision. With RPA, companies can automatically gather data from various sources and conduct precise cost analyses. Robots can identify potential savings areas, monitor expenses against set budgets, and predict future costs based on historical data.
Ultimately, automation in finance and accounting departments not only accelerates processes and reduces mistakes but also allows finance professionals to focus on more value-added and strategic tasks.
How does automation in accounting and finance look in practice?
Below, we'll present an example workflow of a robot based on the analysis of the invoice reconciliation process, which is one of the key processes in every finance and accounting department. It consists of several steps that need to be strictly followed to ensure accuracy and timely payments. Automating this process can yield significant efficiency and accuracy benefits.
What the future holds…
Over the past few years, we have observed the dynamic development of RPA (Robotic Process Automation) technology in the areas of accounting and finance.
According to a 2022 Deloitte report, 73% of organizations globally are already using RPA technology, and more than half plan to increase investments in this field in the near future. This trend is particularly strong in the financial sector, where precision and speed are crucial. The future, therefore, looks promising...
In conclusion…
Automation in accounting and finance not only saves time and reduces the risk of errors, but also facilitates payment tracking and provides better visibility of a company's finances. Moreover, with digital invoice storage, a company can easily comply with legal requirements concerning document archiving. In an era of increasing emphasis on efficiency and accuracy, automating this key process is not just desirable, but essential.
Do you have questions? Contact us!
If, after reading this article, you have more questions about implementation stages, training, or any other topic related to robotic process automation in the finance and accounting department, don't hesitate! Leave your contact details, and we will be happy to answer all your questions.