Executing finance and accounting processes, specifically accounts payable, poses a significant pain point for many businesses across various industries. Even in today’s technologically advanced business world, many accounting departments still rely on manual employee involvement and paper invoices in order to process payments.
Accounts payable processes are repetitive, time-consuming and typically require high levels of involvement from employees. As such, robotic process automation (RPA) is an excellent fit for the automation of AP processes. But even so, recent research by Basware and MasterCard indicates only 20% of companies use automation software internally to alleviate their accounts payable headaches. While RPA isn’t a one-size-fits-all solution for all companies, the technology has the ability to help companies streamline their financial tasks in order create enhanced efficiency and operational control.
Challenges and Benefits
As with the implementation of every new technology, there are doubts regarding the capabilities and success rates of RPA for AP activities, especially because financial processes are so critical to the overall functionality of companies, particularly those in variant-rich industries. While RPA is making significant impacts in the automation of activities by companies worldwide, a recent Oracle whitepaper entitled “Process Automation for Accounts Payable” points to some of the challenges that RPA technology will face in transforming AP activities. Some of these challenges include:
- Non-standard invoicing: Invoices that companies receive from their suppliers sometimes still arrive in multiple different formats: as a paper copy, a Word document, a PDF email attachment, or a fax. Because invoice formats are not always standardised, it is often a challenge for companies and automation software to handle them in the same way each time.
- Unstructured data: A company’s finance team is responsible for transferring the data from various invoice formats into the company’s database. The AP staff is also responsible for manually dealing with any discrepancies between the bill of lading, purchase order, and invoice as well as approving payments. Because the data in these invoices is typically unstructured, this manual transfer process is time-consuming, prone to errors, and can be difficult for certain automation softwares to handle.
Despite these obstacles, there have been recent significant improvements in the capabilities of RPA, especially in terms of optical character recognition (OCR) and automated approval/exception resolution. Improved OCR, for example, has allowed companies to allow software robots to interpret and handle scans of paper invoices in a much more efficient manner. As a result of these developments, there has been an increased ability to handle invoice discrepancies and even paper documents without as much employee involvement. This means that RPA technology can deliver even more improvements to the efficiency of AP processes to promote positive business outcomes and competitive advantages. Some of the benefits include:
- Automated reconciliation of matching errors: A large, time-consuming burden for a company’s AP staff is error reconciliation. This can include discrepancies in purchase amount or vendor contact information between various essential documents, such as invoices and purchase orders. By automating most of this manual matching, robotic software robots can reduce the amount of oversight and exception handling that this required by employees. This means that employees will be able to focus on more critical finance responsibilities, such as budgeting and planning.
- High scalability: Accounts payable workflows designed with RPA can be replicated or reused across different business departments and between locations, meaning that quick scalability can be easily achieved. In addition, the number of active robots can be scaled up or down with little to no additional cost. Scaling the robotic workforce is a critical component of meeting more permanent company growth or to temporarily meet increases or decreases in AP activity.
- Quick account closure: Because it depends on input from multiple employees, closing the books each month, quarter, and year can be a time-consuming process. However, RPA software can be used to automate data input, error reconciliation, and some of the decision-making required by a company’s finance staff. Not only does the use of software robots reduce the number of errors made in closing accounts, it also means that account closure can be completed much more quickly and without as much human intervention.
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This article originally appeared on UiPath.com. Inpute are authorised rellers for UiPath. UiPath is a leading Robotic Process Automation vendor providing a complete software platform to help organizations efficiently automate business processes. UiPath named the RPA provider with the strongest current offering in 2018 Forrester Wave™ for Robotic Process Automation.