Financial institutions deal with countless transactions, reports and clients personal information on a daily basis. The high volume of work and processes is time-consuming, and often challenging. Here come RPA in financial and accounting services that can completely transform how the work is done. Robotic process automation was actively used in industrial manufacturing and now started entering other industries too. There are lots of specific areas of a business in which RPA can be useful. In the article, we are investigating the role of RPA in finance and accounting practices:
- What is robotic process automation in finance and accounting?
- Advantages of RPA in finance and accounting
- RPA use cases in financial and accounting services
Let’s proceed to find out more!
The Role of RPA for Finance and Accounting
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RPA is a relatively new technology that impacts Fintech services. Known as smart RPA deployment or “intelligent automation,” “RPA” is an umbrella term for advanced software technology (software robots) that can be programmed to perform a series of tasks that previously required human intervention. Other robotic solutions incorporate machine learning and include cognitive computing and artificial intelligence.
The revenue from the global robotic process automation market size is expected to grow to $11 billion by 2027 compared to $1.40 billion in 2019.
There are many tasks within accounting and finance that you can take part out of human hands for more efficient work. Robotic process automation is sometimes referred to as “digital FTEs” or “human proxies” as it can be used to handle routine, rule-based tasks, and basic operations and interact with systems as a human would.
Practical process automation applications include risk assessments, security checks, data analysis and reporting, compliance processes as well as most other repetitive administrative activities. This gives financial institutions more time and workforce to perform their core responsibilities.
Key Principles of RPA in Finance and Accounting
RPA is not one particular tool or product. If you decide to implement RPA, you need to evaluate multiple RPA solutions in the marketplace to identify which best fits best to your company.
RPA software runs separately from applications and underlying systems and can be implemented relatively easily. However, it requires human interaction for quality control and maintenance. For instance, if you make any updates to your corporate CRM system, RPA software needs to be modified as well to ensure it is performing accurately.
RPA doesn’t require the same level of engineering involvement as traditional automation does. RPA is faster, more affordable, and easier to program and maintain.
Due to its scalability, there is no limit to the number of processes that RPA can manage. Usually, the processes for automation are definable and rule-based, making reporting, accounts payable, clients feedback capture, and so on.
Main Benefits of RPA in Finance and Accounting
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Despite the fact that there may be some risks related to new technologies employment, there are even more pros of RPA in finance and accounting:
RPA saves finance and accounting departments from 25K hours of work that can be avoided. The application of RPA in accounting is an effective way to boost operational efficiency and spend less time on daily tasks. Use these saved hours on brain-storming or other revenue-generating activities.
Another benefit of robotic process automation in the financial industry is budget optimization. RPA solutions can save up to 40% in labor costs. As it was mentioned above, RPA saves resources by handling repetitive tasks faster than humans.
Integration with existing systems
Unlike traditional automation in finance and accounting, RPA can smoothly interact with existing corporate systems (e.g. company’s ERP or CRM). They can manipulate data, set off responses and review reports, and carry out problems. Robots in accounting have the same level of security and access as a real person, but they can work without interruption.
Accounting includes complex processes and impacts different companies’ departments. Minor human errors in each department can accumulate, leading to significant losses. RPA services for the accounting industry let companies automate manual accounting procedures to eliminate human errors from the equation.
There is always a need to hire a new team member to help manage the workload in case transaction volume gets to a certain point. With RPA if workload increases, the bot’s output can scale as needed.
With all systems integrated, financial teams can get a complete, 360-degree view of all accounting processes. It helps to understand the logic behind all financial reports, allowing make smarter business decisions.
The Best Examples of RPA Use in Finance and Accounting
Most financial companies and institutions have to process hundreds of transactional records per day, dig across information systems, extract data, and complete data entry. Let’s talk about RPA use cases in finance and accounting to discover how robotic process automation streamlines the daily routine.
To monitor financial performance has to be tracked on a daily basis. Manual reports are time-consuming and require good expertise. RPA makes the business processes more transparent and ensures financial forecasting accuracy by generating reports
- Income statement
- Variance analysis
- Balance sheets
- Financial close processes
- Management reports
Сompanies of all industries, especially in Fintech, manage invoices on a daily basis. It is another complex and time-consuming process that RPA in finance can deal with most efficiently. It automatically processes invoices, stores it, automates the data input, and error reconciliation, and minimizes potential errors and the need for human intervention.
Companies accumulate expenses from different business activities. Expense reporting is crucial for efficient bookkeeping and finance management. However, this process is tedious and costly when performed manually. According to statistics, producing one expense report costs about $27. Automation can reduce this cost to $5/report. You can automate expense reporting using RPA. Robust RPA bots can aggregate data into expense reports, attach receipts to corresponding entries, verify existing expense logs, and flag policy violations or data discrepancies. Automating this process using RPA can reduce errors, improve employee experience, and enhance adherence to company policies and legislation.
Credit card processing
With RPA in banking, the process of validation of the customer information and approving credit cards can be done within hours, instead of weeks as it used to be. RPA makes a decision to approve or disapprove the application by interacting with multiple systems simultaneously to validate the information: e.g. documents, background checks, credit history, and take
Financial planning and forecasting
Financial statements and data must be properly input to predict the future accurately. Robots collect, store data, and transform it for the purpose of forecasting. By using historical data automation solutions can put together a complete picture of what you can expect the future to hold. With this information, you can create a financial forecast and then also benefit from conducting variance analysis seamlessly.
RPA services for the accounting industry can automate the process of tax calculations and compliance by gathering data, preparing reports, creating tax basis, performing tax returns, and submitting these reports to tax authorities.
Among other RPA financial use cases is employee payroll management. Usually, this process is time-consuming as it includes such subtasks as data extraction and entry, timesheet validation, employee information verification, scheduling payments, and calculating pay-out. To avoid any inaccuracies or delays, RPA automates payroll management by extracting data from different sources and calculating payments with 100% accuracy.
Consider Inoxoft Your Trusted Partner
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The advantages and RPA accounting use cases we mentioned cover most business processes related to finance. Thus, digital transformation will benefit your finance department, ensuring better productivity, and performing complex and strategic tasks that drive value.
If you want to resolve automation challenges, leverage trading success, and digitize banking services, Inoxoft is a custom fintech software development services and banking software development services company with 8+ years of experience in the Fintech sector that offers you
- A dedicated team of fintech software engineers
- Full-cycle project implementation
- An effective delivery approach based on iterations
- And a top-notch solution to benefit your business