What if journal entries and account reconciliation could be done by a robot with high-level accuracy? Your staff would have more time to work on new initiatives and you’d be able to increase productivity while maintaining accuracy and accountability.
Robotic process automation (RPA) makes this “do more with less” scenario possible. Although only 29% of corporate controllers are using it for financial reporting processes, Gartner predicts that by 2020, 88% will use RPA.
“Most controllership processes have clear steps and defined rules,” says John Van Decker, VP Analyst, Gartner. “These manual and repetitive tasks are a perfect opportunity to leverage RPA.”
The value of RPA
RPA improves the accuracy, accountability and productivity of the finance function because it:
- Reduces human error and inconsistency. RPA removes the inconsistencies of human performance and consistently delivers accurate results. According to Gartner research, human error within the finance function produces, on average, 25,000 hours of avoidable rework at a cost of $878,000 per year.
- Improves the quality of governance and the controls environment. RPA tracks the action of each bot, every access made and every output it generates, and stores those data points to a centralized database for review. This audit trail capability enables organizations and auditors to hold relevant parties accountable for the bot’s actions by reviewing transactions for accuracy and consistency and access logs for malicious or unauthorized access.
- Lessens manual and repetitive work to refocus talent on higher-value opportunities. Bots deliver increases in productivity when compared to human full-time equivalents and are suited to run 24 hours a day, seven days a week, 365 days per year. Most employees view the work best suited for RPA as mundane and tedious. RPA enables organizations to take this work away from individuals and redeploy their talents to more analytical, high-value activities.
Roadblocks to RPA financial reporting implementation
While the benefits of implementing RPA in financial reporting processes are many, accounting leaders still face perceived roadblocks. To overcome them, leaders should first understand the root problems and then take action to remedy them. Use these recommendations to do this successfully.
Roadblock No. 1: Hesitancy to remove humans
Unlike cognitive automation that mimics human judgment — such as machine learning and artificial intelligence (AI) — RPA is unable to learn from data patterns and make judgments. Because accounting leaders perceive there are more financial reporting process steps that require or benefit from human judgment than may actually exist, they may maintain unnecessary human interaction points.
Recommendation: Resist unnecessary human interaction points within financial reporting processes and focus on value instead. Limit the return for a designated period of time — set through your governance model — by running a manual process in tandem with an automated process. The tandem processing control demonstrates or tests the bot’s performance to provide proof to accounting leaders of the accuracy and consistency of the process without human intervention.
Roadblock 2: Perceived low ROI
Accounting leaders are forced to compete for limited organizational resources. Although finance has identified opportunities for financial reporting process automation, the benefits must exceed or be comparable to other opportunities within other parts of the business.
Recommendation: Push for a holistic ROI formula that includes more qualitative measures in addition to the typical quantitative cost measures (FTE reduction or FTE time savings). The goal is to obtain a more accurate and comparable measure. Consider including other variables, such as decreasing employee turnover, shifting talent to higher-value opportunities, minimizing potential rework and advancing the team’s technological lessons learned.
Read more: Get Started on Robotics in Procurement
Roadblock 3: Process standardization delays process automation
Traditionally, implementation of new IT systems first requires standardization. Many leaders believe this is the same for RPA. However, this approach is time-consuming, can result in rework, holds the potential to disrupt operations and results in delayed implementation.
Recommendation: Adopt a standardize-as-you-go approach to eliminate potential process improvement rework. This approach also creates immediate capacity and minimizes disruptions to the rest of the team. Be aware that in instances where the process output will differ from the original human output, the process will need to be standardized and tested before being automated.