RPA in finance fits seamlessly into processes and workflows to take up short, repetitive tasks where accuracy is critical and helps reduce the time and costs that are likely to increase turnaround time due to human error.
RPA, or robotic process automation, is a technology that uses bots to automate individual tasks that make up larger processes and workflows for operational areas of a business such as sales, marketing, accounting, financial management, and others. RPA lends itself particularly well to finance and accounting functions, helping professionals automate some tasks that are repetitive and low-value but at the same time, demand a certain degree of accuracy and speed.
For years, enterprise systems and reporting tools have improved efficiencies in financial management, accounting, and compliance for large enterprises that have invested in automation tools. But today, implementing automation is not only possible and affordable for small and medium-sized businesses, but also cost-effective and better for long-term productivity, accuracy, and decision-making.
5 ways RPA in finance can be applied to operations
Analyzing financial data and documents
Organizations must be aware of their financial position at all times, and map out and plan for potential risks to operating efficiently. Financial reports are usually created by combining numerous documents and reports during a fiscal year. It takes a lot of effort and time to create these reports and accuracy is critical here, always.
Depending on your company’s performance, you may need these reports several times in a month or a quarter. With respect to financial management processes, automation has made it possible for organizations to use this data for competitive advantage through the fastest, most accurate analyses possible. Financial reports for businesses can now be created in real-time with robotic process automation and artificial intelligence, and track every single transaction to assess its impact on the top line and bottom line.
To carry out their operations effectively, businesses need to manage their cash efficiently. Accountants had to manually tally bank statements against the P&L account and balance sheet before automation was introduced to accounting and finance, which did not allow for fast and completely accurate analyses and required multiple rounds of checks by several people. Checking every transaction manually is tedious and can also lead to errors, and RPA can solve this by taking over these critical, error-prone tasks from humans. In the case of a discrepancy in tallying payments, dues, and receivables, RPA can easily flag any instance of underpayment or over-payment by pointing exactly where incorrect data may have been fed. These are both potentially damaging situations that can affect a business’s cash flow and creditworthiness but can now be corrected by implementing RPA across financial reconciliation processes.
Managing payables, receivables, and invoices
The finance department’s accounts payable and accounts receivable functions depend on processing invoices. An invoice contains a lot of important data which must be recorded accurately for compliance. Traditionally, an employee inputs this information into the accounting software after verifying it manually. Furthermore, invoices are sent in paper format and image format which are cumbersome to manage, especially for large enterprises with a high cash flow and daily expense volume. In the accounts payable processes, suppliers send invoices verified with purchase orders, which are then entered into the system, and a schedule is created based on which payments are authorized to be disbursed on a given date. Any organization must follow this procedure for all invoices that it receives and complete them within a defined time frame to avoid late fees and defaults.
Any errors or delays in reporting can disrupt a company’s cash flow. By maintaining an organized system, the company can manage the cash flow more efficiently. You can accomplish this by deploying RPA for crucial financial management operations by automating the individual tasks across the payables and invoice management functions. Furthermore, you can leverage detailed dashboards that present the information or analyses in real-time, making it a single source for managing payments and compliance.
Paying your employees on time is as crucial as being regular with vendors payments. Every employee’s monthly salary is traditionally calculated by the human resource department based on their workdays and leave, along with reimbursements for travel expenses. To ensure that the organization has enough funds for paying its employees, HR should coordinate with the finance department. An automated system will quickly compute this amount and return it to HR. Additionally, communication and coordination become easier when cash standing is updated in real-time.
Maintaining tax compliance
Tax calculations and timely tax payments are extremely important for legal and compliance requirements for businesses. Enterprise and corporate taxation requirements are rather complicated and the process involved takes a lot of time and effort, so your organization will have to pay an expert to handle it for you. There are many steps involved in this process. With automation software, this process can be simplified. RPA can extract data, manage workflows, estimate adjustments, calculate transfers and taxes, and much more. You can automate it with RPA at a reduced cost, lesser time, and with maximum accuracy.
Automate and manage finance and accounting with VBeyond Digital
Automation in an enterprise’s finance and accounting-related processes facilitates a faster and more efficient way of doing business, with the ability to scale up capacity and speed as and when the need arises. This way, finance professionals and managers can contribute to decision-making and other essential business outcomes in an organization more effectively.