According to Gartner, RPA is the fastest-growing segment of the global enterprise software market in the past year. The technology harnesses the power of AI and machine learning to automate diverse, repeatable tasks such as recording transactions, report generation, and data validation.
In a nutshell, RPA analyzes data and makes decisions based on a set of pre-defined logic parameters in order to automate tasks formerly performed by humans. Let us consider accounting as an example; It is a process-oriented function that is predominantly paper-driven and requires the same set of processes to be performed repeatedly.
Since it comprises a repetitive set of tasks, the workforce is under immense strain, in turn increasing the scope for human error. And in the context of a Certified Public Accounting (CPA) firm, the human effort involved to carry out these processes is simply humongous.
Adopting RPA technology, in this case, helps automate back-office processes to produce high quality, accurate results. CPA Innovations is one such company that helps CPA firms automate repeatable, mundane tasks with the help of RPA technology.
Advantages of Using RPA in Accounting
When we talk of automation in accounting, a common query we are often faced with is the difference between Excel macros and RPA. So what makes RPA different? Is it really more beneficial than using standard Excel macros? The answer is yes.
To begin with, we use Excel macros to automate repetitive keystrokes that help create and edit spreadsheets, only in Excel. While they do reduce production time, macros are used in only one application. RPA technology, on the other hand, can be used across any accounting application and data storage system.
Essentially, RPA acts as a bridge between all the applications that a CPA firm uses on a day-to-day basis. Some of the most prominent benefits of using RPA technology include:
- 24/7 Performance – Unlike humans, RPA applications have no time constraints. They can work non-stop, in turn increasing the firm’s overall productivity.
- Freeing-up employee time – RPA reduces the human effort involved in carrying-out slow and repetitive tasks. Hence, employees can use their time in a strategic manner and take-on more value-added tasks.
- Customizable workflow – Depending on the requirement, an RPA application can be customized to carry-out specific parts of the accounting process. Additionally, it can also carry out multiple processes at once, such as accounts payable and receivable, expense management, tax calculation, and report generation. An efficient RPA application can scale to meet the demands of the CPA firm.
- Non-invasive application – RPA applications do not interfere with or require a change of the existing IT infrastructure. Instead, RPA technology integrates itself as a layer or bridge on top of or across the existing infrastructure.
- Reduced error-rate – The automation of tasks produces consistent and accurate results, thus reducing the probability of error in the output.
Use Cases of RPA in Accounting
Accounting comprises of many functions, all of which can greatly benefit from RPA technology. Here are a few examples of how RPA is transforming accounting.
Accounts Payable and Invoice Processing
With RPA, we can set up workflows to manage different vendor payments automatically. All we have to do is enter the data and let the application prepare and process the payment.
The software validates each invoice against the defined data fields to extract the information and store it in a financial database. We can also configure it to separate invoices based on vendor, client, location, etc. Additionally, separate workflows can also be created to approve the accounts payables and process bulk payments. When processing approvals, the application forwards the received invoice to the appropriate authority as defined in the workflow.
If more than one person needs to sign-off, then the application automatically progresses from one person to the next until the approval process is complete. This drastically cuts-down on process lag that often occurs when having to wait for the invoice to pass from one authority to the next.
When you use an RPA solution by CPA Innovations, the application will automatically review, process and obtain approvals for all vendor payments.
RPA applications can extract data from physical tax forms and populate the information into digital tax forms. We can configure the application to carry-out many rule-based tasks such as:
- Data extraction and information gathering
- Data validation
- Running reports
- Calculating taxes based on compliance norms
- Calculating transfer pricing or international exchange rates
- Managing workflows
- Calculation of adjustments
- Information population into work papers or tax software
Regulatory Compliance and Reporting
Regulatory compliance and reporting involve multiple departments, systems, and applications. At CPA Innovations, RPA technology is designed to ensure timely and insightful reporting that can add significant value to your business.
The RPA software automates tax-related tasks such as capturing and manipulating data to auto-generate regulatory reports, closing out sub-ledgers, delivering financial filings to jurisdiction-specific regulatory authorities, optimizing the end-to-end tax management process, reducing risk and cutting down on costs. Using an RPA for reporting also helps you maintain a detailed audit trail.
Although RPA in accounting is a relatively new niche, it is one that holds great potential. Globally, we are seeing CPA firms, banks and other finance bodies adopt RPA to bring in cost efficiencies, process optimization and deliver accurate results. From being deployed to handle simple, repeatable tasks, RPA technology today has evolved enough to bring-in tangible change and improvement in accounting.