Robotic process automation in finance has taken organizations by storm. Underneath all businesses and their operations lies their finance process. Finance processes like invoices, cash flow management, payroll, financial analysis, bookkeeping, etc., are more or less similar to businesses of all domains. Organizations are rapidly integrating robotic process automation in finance departments. But what is RPA automation in finance? RPA puts an end to repetitive tasks. Robotic Process Automation (RPA) refers to software technology that streamlines operations. Imagine a robot that works on a defined set of instructions. RPA is just that.
Although the finance process is the same, the role of finance professionals is evolving. Automation in finance helps these professionals dedicate their time to more productive tasks. RPA automation in finance bids goodbye to repetitively tedious tasks, human errors, delays and defaults, and much more. With robotic process automation in finance and accounting, you no longer need to go through the tiring process of copy-pasting data and formulas into a spreadsheet. The bot will do it for you – quick, error-free, and efficient. It allows your employees breathing room and breaks the monotonous cycle.
Walmart, Deutsche Bank, AT&T, Vanguard, Ernst & Young are a few enterprises that have integrated automation in finance functions. The global RPA market size was worth $1.57 billion in the year 2020. If you want your business to propel, it is only wise to start making changes at the lower levels of functioning. The changes will then vibrate on the higher levels as well. Invoice processing, PO processing, cash data processing, vendor contract compliance, etc., are a few robotic process automation examples in finance.
The five best areas for Automation in the finance sector
Invoices, Payables, and Receivable
Invoices are a vital part of the accounts payable and the account receivable functions of the finance departments. An invoice is full of important information. Traditionally, an employee will input this information after verifying it into the accounting records. Moreover, invoices are sent in paper format but in image format as well.
Account payable involves receiving invoices from the suppliers, verifying them with the purchase order, entering the information into the system, scheduling the payment and authorizing them. This process has to be completed for all the invoices a company receives. Furthermore, this process needs to be completed within a defined time frame to avoid late fees or defaults.
In contrast, accounts receivable involves sending accurate invoices as per the incoming sales order, authorizing it, and receiving the payments. It has to be done within a stipulated time to ensure that your company receives the payments well on time.
An error in any of these processes or a delay can disrupt the cash flow of the company. However, a well-organized system will help the company manage the cash flow better and gain profits via discounts on early payments. Automation in finance functions will help you achieve this. Furthermore, the availability of this data in real-time on a dashboard will be a one-stop destination for checking the status.
To work efficiently, an organization must always be aware of its financial status and the possible risks. Organizations plan their fiscal year based on not one but many reports.
Creating these reports is a demanding task. They demand accuracy in a short time. Furthermore, you need these reports on several occasions depending on the performance of your company. Robotic process automation and artificial intelligence in finance have enabled businesses to create these reports in real-time. Surprisingly, businesses can now generate reports for every single transaction. What does this suggest? In-depth, accurate analysis in the shortest time possible. Automation in the finance sector has enabled organizations to leverage this data to thrive in cut-throat competition.
Efficiency in cash management ensures that the businesses have the required capital in hand to carry their operations. Before integrating automation in accounting and finance, the accountant would tally the bank statements against the balance sheet to ensure that all dues were paid and all the payments were deposited. Checking every little transaction is not only taxing but also prone to errors. A discrepancy in the tallying will reflect underpayment or overpayment. Both of which can cause damage. Understanding current cash positions assist in determining if the company is making profits or losses. Accordingly, you can arm yourself to either strengthen the current standing (in case of profits) or to improve it (in case of a loss).
It is equally important to pay your employees on time, as it is to clear the dues of your vendors. Traditionally, the human resource department will need to calculate the monthly salary of every employee depending on the days of work, leave, remuneration of travel expenses, etc. HR also needs to coordinate with the finance department to ensure that the organization has enough funds to pay its employees. Automation will quickly do this math and return the final amount. Furthermore, when the current cash standing is available in real-time, communication and coordination become easier.
Calculating taxes can be a headache. Taxation rules and lingo is complicated, and your organization will thus pay a heavy amount to an expert to do this for you. This process is lengthy and tiring. Automation software simplifies this complex process. RPA can assist you in data extraction, workflow management, calculating adjustments, transfer pricing, tax accounting and much more. RPA will do it for you at reduced costs, lesser time, and with utmost accuracy.
To culminate, automation in the finance industry has changed the way finance works. Professionals in the finance department no longer spend the better part of their day navigating through spreadsheets and figuring out entries. The potentials that employees have goes beyond spreadsheets and formulas. Today, they contribute to decision making and other essential functions in the company. All the companies that have adopted robotic process automation and artificial intelligence in finance have greatly benefited.
FAQ’s (Frequenty Asked Questions)
- What should I automate in finance?
You can automate repetitive tasks in finance such as invoice processing, PO processing, data entry, bookkeeping, etc. Automation will lend speed, accuracy, and reliability to these processes.
- What is automation in finance?
Financial automation is the process of using technology to accomplish repetitive, mundane tasks like invoice processing, data entry, bookkeeping reconciliation, etc., with little or no human intervention. This frees up time for employees to perform more complex tasks.
- How do you automate a finance department?
You use artificial intelligence, machine learning, RPA, and other technologies to automate a finance function. Begin by identifying the repetitive tasks that need to be automated, and then incorporate the aforementioned technologies. Once these individual tasks have been automated, you can work out how to sync and integrate them all.
- Why is automation important in finance?
Automation brings transparency to streamlined processes, inspiring accountability in your employees and keeping all team members notified about current projects. You can significantly improve effectiveness, lower expenses, and enable high compliance by automating tasks.