Benefits of RPA Technology in Accounting Automation
In 1959, Arthur Samuel developed Machine Learning (ML), which is one of the most important technologies that eventually led to the creation of RPA tech. ML allowed computers to perform several critical tasks, such as translation and text summarization, etc.
RPA tech was first coined in the year 2000, however, the foundational technologies on which RPA technology was built have been around for decades. The foundational technology on which RPA is based are:
The capability of RPA Technology
RPA tech has the ability to
- Interact with other systems via Screen scraping or API Integration or OCI
- Ability to determine actions based on inputs gathered from other systems
- Ability to Report
RPA tech 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 and accounting activities to present the relative complexity of the process areas & their relative likelihood of being automated.
Mckinsey’s findings of the greatest impact, are tasks performed by entry-level finance & accounting staff & finance & accounting shared service centres. Other examples of financial accounting staffing processes typically make good RPA candidates include
- Data Migration and data entry
- Daily profit and loss reporting
- Control testing
Since these processes are mainly rule-based and repetitive with standard input and output report formats and detailed documentation in place.
RPA Tech Implementation
Deloitte conducted a study on RPA technology, attracting responses from more than 400 organizations globally. 53% of respondents had already begun their RPA journeys and 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 despite 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 technology initiatives”. read more
Challenges in RPA Technology 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
Automation is here to stay. Although widespread democratization of RPA technology, the concept of a bot for every employee, may still be far off, digital teammates are already on the payroll services and 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 technology 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 technology as a solution that also exposes staff to digital tools, reduces cost, and paves the way for other technologies.
As businesses demand more, Outsourcing 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 technology risk becoming obsolete or uncompetitive, the finance and accounting teams across the country should embark to brace themselves for the power of the transformation to unleash the power of automation in Finance and Accounting processes.
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