Robotic Process Automation (RPA) is well-established as a provider of efficiency by removing easy, repetitive tasks. The technology is used throughout industries as diverse as banking, manufacturing and insurance1. However, when applied to the office of finance, RPA is just the beginning of the automation journey, not the final destination.
Since finance and accounting (F&A) teams need to take a risk-averse approach to the Record to Report process, they must have an established system of financial controls within their automation framework. Can RPA vendors provide such adequate controls? Are there risk-intelligent opportunities for human intervention? Can the technology be scaled appropriately and maintained by the department?
Below, you’ll find five questions your RPA vendor is not equipped to answer, and why the complete automation and capabilities of a system of financial controls are needed for the office of finance.
1. Do we have process visibility?
Many RPA bots focus on completion and going from Point A to Point B on a checklist. The financial close process is much more complicated and sometimes reactive based on the data and situation involved, so F&A teams need to maintain visibility over activities such as changing statuses.
A purpose-built solution for the financial close offers dashboards that give clear visibility. RPA vendors only offer bots that provide information in a database. A database that requires users to run a report to access their own information, which takes extra time as well as increasing the possibility for error.
Without an established system of financial controls around the Record to Report process, even the most efficient RPA technology is not effective at the end goal: non-restatable financial statements. With those controls in place, a manager can rest easy knowing that they can see potential problems before they compound.
2. How are exceptions flagged?
Basic RPA is often implemented, and then results are received, yet there is always subjectivity within finance. To complete the financial close, you need to build upon your RPA process as well as allow interactions. A system of financial controls works in both automated processes with RPA as well as opportunities for human intervention when higher-level analysis is required.
For example, an RPA bot is set up and can complete a process very quickly and run as programmed— but it can be more challenging to allow users to interact with bots. Therefore, if you need to escalate an item that couldn’t be matched in the matching process, you need a system of financial controls to do the matching process compliant with your organizational rules.
3. Will write-offs be automatically raised in the ERP system?
During the matching process, overwhelming amounts of data are downloaded from the ERP, and an RPA bot checks through it. When the bot says, “I can’t match this item,” then someone has to review it and take it out of the ERP.
However, by utilizing technology tools such as SAP connectors, the validation can be completed in real-time, and as quickly corrected. An RPA bot might struggle to do the same because they don’t have the same connectivity, and they’ll have to run separate routines. With a system of financial controls, you get real-time validation through automated technology.
4. Do we have overall control?
With an RPA bot, it takes considerable effort to create and design bots that maintain the required control of the financial close process. The alternative is to use a purpose-built tool that is designed to give you control without a considerable effort to design it from scratch. With this method, the bots incorporate best practices and are designed for the specific task to ensure you are getting a best-in-class solution.
By applying a full system of financial controls, your F&A team truly has control over its financial close process. The ability to build in policies, workflows and risk ratings allows the office of finance to remain compliant as well as efficient.
5. Who will internally maintain or update our RPA Bots?
Implementing Robotic Process Automation is often termed a “quick win” for the office of finance because they see results almost immediately. Except, those quick results are not easily scaled as the business grows, so they bring in another RPA agent. Now the IT department has to get involved and start linking more and more RPA agents together to perform even simple tasks in a connected manner. Installing thousands of bots can take longer and is more complex than most companies initially anticipated. It is rare to have a genuinely standard process, so employing thousands of bots is necessary for many seemingly simple processes.
Since Cadency® by Trintech is purpose-built for the financial close, it is already geared toward the work of an F&A team. Yes, management will need to set specific compliance requirements, but the platform is already set around those parameters. For the finance team to provide strategic insights for the office of finance, it needs room to grow and work cross-functionally; a risk-based approach through a single, controlled system sets that foundation.
Bring it all Together
Technological improvements are wonderful, but only when they can fix problems without creating brand new issues. Robotic Process Automation has worked as a stepping stone to greater efficiency, but it’s not enough for real transformation. A risk-based approach with a system of financial controls provides both the automation, control and visibility that the office of finance needs.
As the only System of Financial Controls™ that combines all financial close activities into a single platform, Cadency can help transform the Record to Report process.
Learn more about how Cadency’s capabilities can support your office of finance.