In a survey of over 750 financial professionals, the Institute of Management Accountants found that, on average, it takes around seven days to complete the financial close. Additionally, two-thirds of the respondents said that during this process, they relied heavily on spreadsheets, despite the obvious risk they introduce into this complicated process.
A recent article by Forbes provides interesting insights into this survey by explaining how organizations are implementing RPA to reduce risk and shorten the time to close while increasing the value of the work done by their human workforce.
How Organizations Adopt RPA
One of RPA’s greatest strengths is its versatility when applied in a finance setting. Furthermore, early adopters of RPA bots often provide positive returns within 18 months of the deployment.1
However, while RPA implementation can and should be looked at holistically, full deployment is a large-scale project, and should be split into smaller, segmented projects, if at all possible. Forbes suggests that in order to maximize an organization’s F&A value chain, companies may want to start applying RPA to perform set actions within the following processes:
- Financial Close: Post data from multiple sources to sub-ledgers.
- Risk Management: Combine past and present transaction data from organizational systems to flag potentially fraudulent activities.
- Reporting: Aggregate data from various sources such as email, organizational systems and databases and automatically generate reports based on standard rules.
- Payment Processing: Automate pre- and post-payment validation and reconciliation, notify exceptions, monitor and identify potential duplicate payments and automatically transfer pending payment requests into a suspense account to prohibit withdrawal.
- Collections: Automatically receive and post payments, send dunning letters, create reminder reports and a shortlist of customers to call and automatically allocate work to collectors.
All of the suggested areas for RPA bot implementation share a commonality; historically, they’ve required tedious manual human intervention to be completed. As Forbes explains, this “increases both the time spent on financial statements as well as the risk of inaccurate results.” By removing the tediousness associated with these tasks, not only are you removing the inherent risk, but your current team is free to spend their time on higher-value tasks.
Where Your Accounting Team Shines
While RPA has the potential to dramatically increase the value that your finance team provides, at its core, RPA is a tool. And like any other tool, it’s not applicable in every scenario. Forbes explains that duties like “complex finance tasks such as performing due diligence on acquisition targets” or “anything that requires significant decision-making” still require a trained accountant to handle. No matter what, there will always be a need for human intervention to perform the strategic, high-value work.
The Full Impact of RPA
As time goes on, and RPA, and its evolutions such as Risk Intelligent RPA (RI RPA™), continue to help make their workforce’s efforts more efficient and effective, both the average time to close, as well as spreadsheet usage will continue to decline.
However, what both the survey and article don’t touch on, is that because the results for time to close were shown as an average, it’s likely that the time to close for RPA users is much lower than what is stated. Furthermore, because many companies have only just begun their RPA journey, both spreadsheet usage and time to close will continue to decrease as the adoption rates and familiarity with its capabilities grow.
Substantial change, no matter what you’ve evolving, is scary. But as companies expand their RPA deployment, they quickly discover that allowing workers to focus on high-value activities can drastically change the impact the finance function has on the success of their business.
To learn more about the positive impact RPA can have on finance organizations, check out our eBook.
To read the Forbes article in full, please click here.
Written by: Caleb Walter