In a survey of over 750 financial professionals, the Institute of Management Accountants found that on average it takes seven days to complete the close process. Additionally, they found that two-thirds of the respondents said they rely heavily on spreadsheets that increased both the time spent on financial statements as well as the risk of inaccurate results.
This survey was taken before the impact of COVID-19. Since then, accounting teams have navigated their typical workload in a remote work environment. Additionally, new expectations have been placed upon finance functions as they have been tasked with providing business-critical insights that can help guide the overall organization.
While some organizations had long-term plans to implement Robotic Process Automation (RPA) and other more advanced forms of automation, such as Risk Intelligent RPA (RI RPATM), COVID-19 pushed the need for those technologies to the forefront of everyone’s mind as legacy processes and Business Process Outsourcers were pushed well beyond peak capacity. This has been demonstrated over the past few months by a dramatic acceleration of automation initiatives within the office of finance. Organizations that already had RPA in place were able to adjust more effectively to the new “normal”. As we look at today’s landscape, the importance of moving beyond spreadsheets and maximizing advanced technologies like RPA in finance and accounting departments has never been more clear.
However, despite the benefits that RPA presents, many organizations are not leveraging the full ROI of automation, or worse, introducing new levels of risk into their Record to Report process because of a flawed approach to their automation implementation.
Unrealized ROI of RPA in Finance and Accounting
The experts at Trintech have worked with over 3,500 customers globally and have experienced firsthand that most organizations still focus heavily on spreadsheet usage and manual processing. Often these organizations begin implementing RPA to supplement and augment their human workforce by focusing their efforts on one aspect of the Record to Report process— typically the reconciliation process. While this is certainly an improvement over manual processes, organizations should use this as a proof point to justify the addition of automation across more processes. Leading organizations that have expanded their automation across the full Record to Report process with Cadency have achieved up to the following benefits:
- 60% reduction in time to support external auditors
- 62% reduction in write-offs
- 75% reduction in time for rework (full Cadency solution)
- 90% reduction in number of accounts to be reconciled
- 99% reduction in preparation time on reconciliations for reconcilers
- 30% reduction in time to monitor and complete close tasks
- 50% reduction in time to review JEs (for approvers and reviewers)
Avoid Introducing New Risk
As organizations introduce automation into their financial processes, they often look for a quick and easy ROI. For example, by automating the reconciliation process they can reduce the time to close by “X amount of days”. While this is undoubtedly an efficiency improvement over manual processing and spreadsheets, the same cannot be said for improving the effectiveness.
When quickly implementing isolated automation such as this, little attention is spent ensuring that the process itself is accurate and dependable. This leads many organizations to simply execute ineffective processes faster instead of actually improving the ability of the office of finance to produce reliable financial statements. Because of the isolated nature of this approach and the lack of visibility that it offers, it becomes impossible to tell if previous work was done correctly. The risk also increases in dispersed teams due to the breakdown in communication and visibility that naturally occurs in a remote setting. Instead, organizations need to take the time to ensure that the same level of attention that goes into automating the process is given is also given to the process’s integrity.
Leveraging the Cadency System of Accounting Intelligence
The Cadency System of Accounting Intelligence is built on key pillars that enable organizations to start, or enhance, their R2R transformation journey to achieve cost savings and reduce risk holistically. By focusing on both improving the speed at which accountants complete the close process, as well as looking at the process itself to ensure its accuracy and reliability, offices of finance can be assured that both their efficiency and effectiveness are being improved with their automation initiative.
Additionally, The Cadency System of Accounting Intelligence combines advanced automation technologies, such as Artificial Intelligence (AI), Robotic Process Automation (RPA), and ERP Bots, and strategically applies them to support the often complex and complicated R2R process from end-to-end. These technologies offer unique, powerful solutions to some of the most complex accounting challenges and readily scale as the financial transformation journey evolves and the business grows. With this approach, organizations can achieve the maximum ROI on their automation investment.
To learn more about how Cadency’s System of Accounting Intelligence can benefit your office of finance, watch this on-demand webinar.
Written by: Caleb Walter