At Trintech, we believe that risk should inform everything that the Office of Finance does. In the Record to Report process, seemingly small errors can compile over time into massive flags that jeopardize an organization’s compliance with regulatory standards and trust from company shareholders. Compliance frameworks and financial controls exist to catch errors before they become a liability.
Trintech developed Risk Intelligent Robotic Process Automation™ (RI RPA) to improve risk awareness for all members of the Record to Report process. RI RPA not only saves time and effort, but in processes such as reconciliation, automatically performs repeatable and often high-volume tasks to prevent error and minimize organizational risk. Here are three ways that RI RPA works to drive strong financial controls.
Eliminate Sources of Inaccuracy
One of the riskiest components of the Record to Report process is human error, especially when utilizing spreadsheets to complete the close. An estimated 88% of spreadsheets contain errors, many of which occur due to typos or copy-and-paste transfers, among other seemingly minuscule mistakes. One of the best financial controls an organization can place into their processes is to eliminate tasks that don’t require human intervention.
For example, RI RPA works in the reconciliation process by using an organization’s specific conditions of risk and compliance framework to analyze the risk level of each task. Low-risks tasks—that don’t require human judgment— are immediately automated. Not only does this save time for everyone involved in the Record to Report process, but it increases the integrity of the data, and therefore the confidence in the accuracy of the resulting financial reporting. With Cadency, one customer realized that 93% of the balance sheet accounts, which only accounted for 6% of the overall balance sheet, was where they tended to spend most of their effort, and these were all low-risk items that could be automated. Once they implemented automation into their process they were able to refocus from applying effort everywhere to instead focus on the 7% of the balance sheet accounts that actually needed human intervention.
Test Financial Controls More Efficiently
RI RPA utilizes the financial data tied to different parts of the overall Record to Report process— reconciliations, journal and close behavior— to identify which controls require testing. Rather than a strategy that mass tests the financial controls, RI RPA allows your organization to save time and provide more insight into which financial controls are working effectively and which need to be adjusted.
“Once we implemented Trintech’s solutions, we were able to see significant opportunities for greater efficiencies within our accounting functions.” – Susan G. Komen
Handle Exceptions and High-Risk Items
Because RI RPA automates low-risk and low-judgment accounts, it allows the Office of Finance to focus on the exceptions. Previously, accountants would spend the majority of their time manually matching and reconciling transactions and accounts in the close process. With automation and RI RPA, they can now shift their attention to focus on the exceptions and drill down into the reasons that these exceptions are occurring. Additionally, for reconciliation, accountants can focus on items that are assigned a high-risk factor by the RI RPA software instead of spreading attention evenly across all accounts, which increases an organization’s risk profile.
A strong financial controls environment automatically works to reduce an organization’s risk profile to keep your financials compliant. Trintech’s Risk Intelligent RPA (RI RPA) acts as a preventative measure against risk, rather than resorting to a reactive approach like organizations who are still using risky manual processes.
“With Cadency, we have been able to move all of our accounts under $1 million to be reconciled quarterly based on risk.”– HP, Inc.
Learn more about the ROI that RI RPA can bring to your finance and accounting environment.
Written by: Ashton Mathai