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Why And How Finance Must Build Robotics Capabilities

November 05, 2019

RPA could be a boon to finance, but it requires controllers to rethink internal controls, develop competencies and find new ways to drive efficiencies.

Robotic process automation (RPA) offers huge potential for controllers as they pursue their mandate of financial integrity and continuous improvement, but it’s not without risk. 

“Our research finds that controllers are rapidly digitalizing their functions, and this will dramatically impact how the controllership operates,” says Dennis P. Gannon, VP, Advisory, Gartner. “Controllers will need to broaden the scope of internal controls, find new sources of process efficiency and develop technology-savvy skill sets in their teams.”

Watch webinar: Robotic Process Automation in the Controllership

RPA pros and cons

Gartner predicts that nearly 90% of corporate controllers will soon be using RPA in financial and management reports, accounting closes, technical accounting and cost-related activities. What’s required for successful adoption is a candid assessment of RPA’s pros and cons, and an action plan for change.

RPA, cognitive computing and artificial intelligence (AI) are still emerging, so proven use cases are limited to date. But automation tools can eliminate the time employees spend performing mundane clerical and data manipulation; reduce manual labor and the risk of data-entry errors; and increase efficiency and free up employee time to pursue more valuable work. Automation tools may also enable controllers to reduce head count and costs.

But as with any new technology, risks exist. Automation raises the possibility of programming errors, and makes end-to-end processes (e.g., report-to-record, order-to-cash) instantaneous — forcing the controllership to look elsewhere to drive continuous improvement.

And as RPA becomes more commonplace, internal controls teams may enter production with unknown financial reporting risk. It’s especially critical to delineate clearly the responsibilities of bot development, bot operations and bot outputs — and associated human credentials. A lack of proper controls and practices can create fraud and other risks. 

Read more: Digital Demands CFOs Rethink How to Deliver Value

Must-haves to leverage RPA

To capture the benefits and minimize the risks of RPA, rethink the design of internal controls, look to develop competencies and find new ways to reduce inefficiencies.

Expand internal controls

New automation risks require controllerships to design new governance measures for automation tool programming. Well-designed automated solutions prevent processing errors, allowing you to maintain the integrity of your financial statements and regulatory reports. 

They also embed governance measures into the automation tool’s programming, enabling you to cross-reference multiple sources of information and notify users of potential inconsistencies.

Establish governance measures for automation tool design and implementation, including checkpoints for reviews of the information generated and periodic audits to check for both human and automated sources of error.

Search for new continuous improvement opportunities

Establish clear and efficient methods for responding to data entry and other forms of errors detected by automated tools. Prevent automated process stalls by creating efficient methods to address bottlenecks.

Stop thinking of robots as simply tools to reduce manual labor. Instead, view them as strategic partners that merit collaboration and support. Encourage staff to see themselves as both accountants and tool administrators.

Read more: Why Not Work With a Bot?

Develop technology-savvy skill sets

Automation will spur a complete redesign of accountant roles and responsibilities, starting with entry-level positions responsible for manual accounting activities. As those positions disappear, look for other ways for junior talent to learn on the job. 

You also can’t afford to lose more experienced talent. “In-depth employee knowledge of the accounting function and the ability to interpret new regulations is increasingly important as technology develops,” says Gannon. 

Adhere to good change management principles to ensure buy-in from skilled technical accounting team members and support the development of their digital competencies. Give technology-savvy team members new roles and responsibilities to transform the ways in which the function operates.

Learn more: Seize the Opportunity: Robotics in Finance

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