What is robotic process automation?
Advances in technology are fuelling global competition and driving the evolution of radical new business models.
What is robotic
process automation?
And how can accounting
and finance professionals use it?
Robotic process automation basics
“Automation” describes a process or procedure that’s performed with minimal human assistance.
Early forms were mechanical or, later, electrical. In the age of computer-enabled automation — exciting new forms, enabled by cognitive computing, are on the way. Robotic process automation (RPA) is one of those forms. The term RPA may sound complex or even intimidating, but the technology is quite simple. If you've ever created mail merges or macros in Excel, you've already worked with automation.
Eliminate the routine to add value
RPA is a type of software, or bot, that eliminates boring, repetitive, low-value tasks humans currently perform. RPA “bots” save time, money and make people more productive.
These bots can automate many routine “swivel chair processes,” where people take data from different systems to be combined, analyzed or simply actioned. To be clear: RPA is not about androids taking human jobs. It’s about software bots performing routine, time-consuming processes — such as data entry or invoicing — so that highly skilled knowledge workers, such as CPAs, can focus on adding value.
In short, RPA frees professionals from laborious tasks and allows them to focus on doing things only humans can do, such as developing strategy, offering recommendations and building
client relationships.
What is RPA and why should you care?
Your fast track to automation
RPA is straightforward to implement. Because it overlays existing systems and can replicate human (keyboard) input, it’s deployed without
re-programming or making any changes to current systems.
In fact, you can complete an RPA project’s proof-of-concept stage within just a couple of weeks, and roll it out soon after.
That means RPA is a relatively inexpensive way of providing workarounds and using data from legacy systems more efficiently.
Bots and humans working together
RPA is sometimes referred to as the “simple form” of automation because it’s relatively easy to implement. That makes RPA a good starting point for those at the beginning of the automation journey.
Bots can follow instructions and perform tasks as instructed by humans, faithfully replicating a human’s actions. But bots are only as good as the humans who program them. Processes and software do change, so a strong partnership between finance and IT is critical to keep the bots working correctly.
The best way to begin is to try not to automate an entire end-to-end process but to start with one task at a time.
And remember: One trait humans have that machines don’t is judgment. Machines do what a human tells them to do. Your ability to analyze, strategize, plan and then advise business partners or clients based on insights you’ve gleaned, is something a machine isn’t capable of.
Automation: some of the pros and cons
Greater efficiency
-
Less labor time
-
Fewer errors
-
Easier fixes
Ease of implementation
-
Works with current systems
(no need to “rip out and replace”)
-
Relatively inexpensive
-
Speed (proof of concept in two weeks, working inside two months)
Caveats
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Good governance is vital (you need to know where the bots are buried).
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Bots need to be maintained or amended: they work best alongside people who are familiar with the processes.
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RPA can delay recognition of the need to replace legacy systems.
Accounting
and finance professionals must routinely combine data from different sources.
This might even be part of your daily tasks. If so, you probably have a deep understanding of the best places to build, amend and maintain bots as processes and accounting rules change, or the underlying software is updated.
RPA allows computer software to capture data from the organization’s applications to complete the steps that form a process. It does this by following a prescribed sequence of steps, much like a person might do to:
- Log in to an application
- Open an attachment
- Search a database
- Find, copy and paste structured
data run calculations
- Complete templates
- Send reports or files to others
Bots can be part of an integrated workforce, working alongside people to take over relatively simple tasks, allowing humans to spend more time on higher-value activities.
Automation:
mimicking human processes
At its simplest, RPA software learns how humans carry out a sequence of steps in a process. Then, the software builds a bot to automate the work by following those same steps in a set order. And, because RPA software doesn’t require integration with an organization’s existing software, it can access the same user interfaces that people normally use.
Learning from the experts
It’s critical for finance and accounting professionals to understand RPA since they are most familiar with the underlying processes and are valuable partners when updates are needed.
This means you and your team might need to upskill. Explore professional development opportunities to grow your knowledge of the technology and its uses within the finance function.
RPA in the
finance function
The benefit of bots
Adoption of RPA among businesses
is rapidly growing. In fact, a majority (58%) of large organizations have already embarked on their
RPA journey*.
As COVID-19 accelerates the digitization of businesses, CFOs are increasingly looking to RPA to help their finance teams to do more with less. In an Oracle and AICPA & CIMA webcast hosted in July 2020, finance leaders identified automation as one of their top strategies to reimagine their business for the new normal.
If you haven’t yet used RPA to automate finance tasks, it might be because you’re not aware of all the advantages. A McKinsey survey of CFOs** showed that the biggest obstacle to automating finance work is lack of understanding about where the opportunities are.
Strategies CFOs are implementing now or considering
Note: The percentages in the chart denote the percentage of total responses, rather than the percentage of respondents who selected a given item. Participants could select any number of items.
Results from a poll of more than 1,000 CFOs and finance leaders conducted in July 2020 during the Agile Finance Reimagined webcast series.
Benefits of bots
Using RPA creates efficiencies, improves quality and accuracy and can ultimately help to increase profitability. Most importantly, it takes over manual, repetitive and time-consuming tasks so you can focus on value-add activities like data analysis, decision making and strategic business partnering.
RPA can automate significant elements of finance and accounting processes including:
- Sales orders and invoicing
- Payables and receivables management
- Inventory management
- Fixed asset management
- Financial closings and management reporting
- Regulatory compliance and external financial reporting
RPA in CPA firms
The benefits of bots
RPA offers many benefits for CPA firms including increased efficiency and cost savings through the automation of manual (and time-consuming) tasks. Staff is freed to focus on analysis and insights — bringing greater value to clients.
Handing over repetitive
tax processes
As many tax processes tend to be manual and repetitive, there’s great opportunity for businesses and firms to increase efficiencies with RPA—so tax professionals can focus on strengthening their advisory roles and becoming a strategic business partner. Technologies can be used for a breadth of tax processes including:
-
Gathering and entering data, and improving data accuracy
-
Preparing tax returns
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Accounting for taxes
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Addressing certain types of tax inquiries
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Evaluating risks, such as how a court would rule in a tax scenario
Leveraging RPA to become
trusted advisers
COVID-19 is putting increasing pressure on businesses to do more with less. Companies recognize the value RPA offers and are looking for guidance on how to implement the technology and identify risks. CPAs can provide advisory services and become the trusted adviser to their clients, not only during crises
but after.
Bringing efficiencies to
audit processes
Audit bots help firms gain efficiencies in automating audit procedures. These bots can:
- Copy data across different audit files without risk of human fatigue or error
- Run calculations to determine financial statement accuracy, internal consistency and tie-outs of prior-year amounts
For high-risk areas, such as revenue recognition, RPA is perfect to automate parts of the audit that do not require human judgment.
For high-risk areas, such as revenue recognition, RPA is perfect to automate parts of the audit that do not require human judgment. This eliminates tasks from the auditor to focus on analysis. You can also use RPA for analytical procedures and dual-purpose procedures. The audit processes that are best for RPA are those that have defined and repetitive tasks and do not require auditor judgment.
Challenges auditors may encounter when clients automate processes
RPA implemented by your client could affect the auditor's risk assessment procedures in understanding the client’s processes and controls. RPA does not work well in a changing environment, so changes in disclosures, business processes or accounting standards will not be captured in the RPA rules.
This means an additional consideration by the auditor is required. If RPA is implemented for a process that impacts financial reporting, then the procedures related to internal controls may need to be addressed as different risks of material misstatement may be identified.
Take advantage
of RPA.
How to get started.
RPA positions
you well.
It’s already clear that automation is an important technology that organizations are quickly adapting. So, as an accounting and finance professional, you need to learn to work with automation technology or risk losing relevance.
RPA can help your firm or organization increase efficiency, reduce error rates and deliver greater operational excellence. It is the next step on a journey toward enabling intelligent automation through cognitive computing.
People deliver change
Finance and IT should partner to implement RPA. Finance should own the process and IT should own the system.
Remember, as is often the case with change projects, the technology is the easy part. The hard part is bringing engaged people with you on the change journey.
Get your people on board
An RPA project at any firm or organization is more likely to be successful if the team understands the processes being automated, and how it’s saving them (and the company) time and money.
For accounting and finance professionals, there’s also a great benefit to understanding RPA: It will enhance your career prospects as you develop important new change management skills. You might even become champion of the new technology as you help roll it out across your organization or your clients' business.
Exercise the accounting mindset. Learning to support agile working is easy for accounting and finance professionals. That’s because you already inform and facilitate the management and control cycle — a learning cycle that’s consistent with the rational, measured and commercial accounting mindset:
- Information is assembled
- Decisions are reached
- Actions are taken
- Performance is measured
For accounting and finance professionals, there’s also a great benefit to understanding RPA: It will enhance your career prospects as you develop important new change management skills.
Getting started on RPA: The essentials
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Conduct some basic background research to expand your RPA knowledge. Read articles and white papers including the one from the AICPA and CPA Canada on the auditor’s role in AI. And, of course, look at the resources available at the AICPA Store.
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Look at RPA vendor software. Compare and contrast. The AICPA provides a RPA Vendor Checklist to help you get started asking the right questions.
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Prioritize processes that could be automated in your organization or your clients'. Look at the reasons behind the current level of human intervention and consider the potential for automation.
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Build consensus with relevant colleagues and potential senior sponsors in the business. Engage enthusiastic people who currently carry out the processes that will be automated.
Explore more automation resources.
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