RPA for Finance & Accounting: 10 Best Use Cases

RPA for Finance & Accounting: 10 Best Use Cases

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The financial industry is faced with unprecedented challenges in 2020. Companies can fortify their standing by using robotic process automation also known as RPA for finance and accounting functions and focus on bringing more value to their customers.

In this article, we will showcase top 10 robotic process automation use cases.


Why are banks investing in RPA?

Benefits of RPA in Finance and Accounting

1. RPA in Accounts Receivable

2. RPA in Accounts Payable

3. RPA in Client Onboarding 

4. Intercompany Reconciliations

5.  Travel and Expense Processing

6. RPA in Investment Management 

7. RPA in Financial Planning and Forecasting

8. RPA in Operational Finance and Accounting

9. Financial Statement Preparation

10. Tax Reporting

Conclusion


Why are banks investing in RPA tools?

In order to secure a place in the sun in a highly competitive and mature market, banks have to turn to technological advances to ensure they keep delivering the best level of service to their stakeholders.

Robotic Process Automation in financial services allows for maximized efficiency by automating repetitive tasks without sacrificing their headcount. Banking industry invests in robotic process automation so as to gain a competitive advantage in their race to digitally transform themselves by cutting costs, enhancing excellence in business processes and providing enhanced  customer service. 

Benefits of RPA in Finance and Accounting

Banks can expect to experience some of the following benefits after successfully integrating robotic process automation into their structure:

RPA in finance and accounting

1. RPA in Accounts Receivables  

The importance of impeccable management of Accounts Receivables should not be underestimated as it directly impacts the cash flow. Mismanaging this essential accounting task can result in undesirable cash gaps. There is this constant pressure to keep Accounts Receivables in check to make sure the company is in good financial standing and there are no cash gaps. 

When done manually this task while simple can still be quite time-consuming as all the information has to be input manually, while juggling multiple systems.  Robotic Process Automation in Accounts Receivable removes the possibility of a man-made error while the PI is drafted. 

Another challenge with Accounts Receivables is managing to keep DSO (Days Sales Outstanding – the time it takes to collect the payment) at a low level, as this indicator heavily depends on the human factor on both the payee’s side as well as on the recipient’s side. For example, an invoice can be forgotten to get sent, which means you will be most certainly forgotten to get paid. Using RPA in finance industry to automate accounts receivables will help make invoices get paid faster by automatically emailing them to the clients. The earlier the customer receives the invoice, the earlier he will pay, which will remove this undesirable delay in payment. 

Overall, Accounts Receivables is a good starting point to kick-back automation in finance departments as it is generally less reliant on external documents as opposed to Accounts Payable.   

Below is the list of areas that can benefit from finance automation:

  • Sales Quotation Generation
  • Invoice Distribution
  • Customer Credit Monitoring
  • Follow-Ups

2. RPA in Accounts Payable

Processing Accounts Payable (AP) is an essential yet manually intensive task in the management of an accounting department. Unlike Accounts Receivables automation, the overwhelming quantity of vendor invoices are non-standard and need to be cross-checked with the purchasing order. 

By employing RPA  bots as your own digital workforce, invoices can be automatically directed to the member of staff responsible for their approval, deadline reminders could be made and delivered periodically. For RPA bots it would be quite a straightforward process to automatically match the purchase order with the necessary invoice, compare them and flag the mismatches (if any) for review.

A few examples:

  • Vendor Invoices Processing 
  • Cross-Checking Vendor’s Invoices with the Purchasing Order
  • Managing the Payment
  • Responding to Vendor Inquiries 

3. RPA in Client Onboarding 

With the compliance regulations growing stronger and stronger, the KYC process is unnecessarily drawn out as your highly-skilled employees spend  hours and hours combing through internal and external systems to collect incriminating information on your customer. By implementing RPA, bots can be the ones gathering all the relevant information by using optical character recognition. This extracted data can be matched with the information on file and a report will be presented  to your compliance manager, so that they, in their turn, could make an informed decision. If no disagreements are found, the bots will enter the data into the customer’s profile. 

4. Intercompany Reconciliations

Another example of finance automatization is various reconciliations. By the end of the reporting period, accounting must close the records for the month to balance the accounts and provide an accurate financial statement to stay in check and be ahead of any issues that may arise. 

This process is a source of constant stress for accountants thanks to manual data extraction & entry, overtime work and attention to detail. On top of everything, it paralyzes the work of the entire department. 

With the help of robotics, your team can shift their focus from number-crunching to doing some actual analytical work that bots can’t do just yet. A programmed bot can be set up instead to check various orders and transactional data gathered from multiple sources. The robot will automatically approve all matching orders and notify if there are any discrepancies.   

Software robots can also streamline bank reconciliations by downloading bank statements and linking them to user accounts, validating balance and transactions, creating journal entries, and much more.

  • Download data (i.e bank statements, subaccount balances) from various sources, upload it to internal systems and present it in a pre-approved format
  • Create a bank statement download workflow for user accounts.
  • Validate balance and transactions and link them to user accounts
  • Create and balance journal entries
  • Notify about any discrepancies 

5.  Travel and Expense Processing

Before Covid-19 people used to go on business trips and travel for meetings and conferences. They would come back with a trail of receipts and invoices. While their trip has ended, those receipts still need to find their way to the accounting department and the expense report. 

When processed manually, it is often discovered that some receipts went missing or don’t qualify as a business expense. This directly impacts compliance and can even negatively affect the job satisfaction of the employee-in-question. 

Software robots can not only pull data from the submitted forms, they can compare it against inter-company policy and legislation norms and notify both the accounting department and the employee about policy violations. 

  • Extract data from the submitted receipt/invoice 
  • Compare it with company policy and legislation
  • Send out an email to request additional information if any discrepancy occurs

6. RPA in Investment Management 

RPA platform can even serve as an investment manager and a financial advisor. Bots can track historic and real life-time investment value. They can evaluate the portfolio and manage the risk. This will enable  you to make a more informed investment decision by providing you with information that is based on the changes on the market in real-time.

7. RPA in Financial Planning and Forecasting

In order to clearly see the current state of things it is essential to plan for the future and to set the targets they need to be set first. The bots can be set up to process historic data, put together financial statements from different departments,  and based on it create a financial forecast, as well as variance reports. Leaving your employees to deal with the complex reasoning processes in organizing a plan action. 

8. RPA in Operational Finance and Accounting

Bank account balances must be uploaded  to treasury systems. This is a time-consuming process that organizations automate to cut costs by saving the efforts of their employees. . 

 Robotic process automation  can transform data into a format  a treasury system can process.  RPA bots can then send the treasury system reports to employees in charge. 

  • Formatting data into a data treasure system can understand
  • Updating the treasury systems 
  • Sending out reports
  • General ledger updates

9. Financial Statement Preparation

A safe way to monitor company’s financial performance is to track profit & loss reports on a daily basis. However, creating this report manually is a time-consuming task, RPA can take this task off your finance department’s shoulder and generate these reports in almost real0life time, while at the same time reducing the risk of inaccuracies.   

10. Tax Reporting

The Tax function is filled with routine processes that are still being performed manually in order to prepare reports and file information required by the law. Disparate systems and finance processes for many organizations often create a challenge in gathering and reconciling tax-related data.

Here is when automated financial systems may come into play.

RPA bots can be placed in charge of gathering data, preparing reports, calculating the tax payable, and even submitting filings to tax authority portals. 

Conclusion

We have considered 10 RPA use cases in finance and accounting.

Robotic Process Automation allows companies to reach operational excellence without sacrificing quality and valuable time. Leverage these use cases to make your financial and accounting processes seamless and guarantee continuous growth.

Still cannot decide on automation in your finance and accounting department? Book a demo and see automation bots in action!