By Vijesh Nair, Practice Manager, Happiest Minds Technologies
Arguably the most popular cliché at the workplace is “Work smarter, not harder”.
Today we have a technology that exactly fits the saying – Robotic Process Automation. What RPA does is, it creates a script to execute tasks which are manual, repetitive and in most cases, human resources do not like doing it. It may sound simple, but the results this technology has shown is phenomenal. It can help achieve FTE reductions by up to 80%; data entry costs by around 70%, improve cycle time significantly and bring in higher efficiency with less errors.
In this article, we will discuss how RPA, coupled with AI, is driving finance transformation in leading organizations.
Most of the finance transformation initiatives are intending to optimize the process, reducing the overheads, equipping human resource with the right skill and leverage technology to overcome major bottlenecks.
The levers of any transformation initiative are people, process, and technology. While people and process have an important role in finance, it is the technology that drives the transformation. The common technology issues observed in finance management are multiple ERP systems, inhouse applications, reliance on spreadsheets for many of tasks (resulting in a lot of manual reconciliation which are prone to error and then followed by rework).
While RPA is not a panacea for all the technology challenges in finance transformation, it is one of the most impactful technologies which can be easily implemented and can give results in a short time.
Let us look at some specific examples of how RPA is helping finance transformation:
- General Ledger Closing – General ledger closing is the most critical process in accounting, which requires data consolidation from multiple sources. The need for high accuracy in numbers gives less room for calculation error. So, using automation, bots can extract data from sub-ledgers and consolidate it to the general ledger, preparation of supporting documents and posting of journal entries. Further, by applying data analytics to the task performed by bots, we can get key trends and insights of various financial transactions.
- Bank reconciliation: Bank statement reconciliation is another tedious process which every F&A department must perform. This process requires many hours of manual effort to match transaction entry in multiple statements. The process is error-prone, and due to its very nature, it frustrates the finance team in due time. In an automated bank reconciliation process bot gets statements of multiple bank accounts, fetches transaction details from ERP systems, extracts relevant information from ledgers and prepares a reconciliation statement. We have observed over 70% improvement in processing time with higher accuracy in bank statement reconciliations.
- Accounts Payable – Invoice handling is one of the biggest overheads for accounts payable departments. AP accountants are mired with invoices from different vendors all having their own format. These invoices need to be validated and then matched with purchase order and GRN. After successful validation, the invoice is approved and made ok for payment in the system. Organizations are automating end-to-end AP using intelligent OCR with RPA. A smart bot can read pdf invoices, perform validation, and can process a large number of invoices in a fraction of the time taken by a human. RPA can help to automate over 60% of manual activities resulting in higher efficiency in the Account Payable process.
- Sales order and invoicing– There are many repetitive tasks in Order to Cash (O2C) life cycle, which can be automated. A bot can help in recording sales enquiry and then create details for new customers in the system accordingly. A bot can also generate quotes based on various data points such as customer requirements, pricing sheets, inventory levels and more. It can also optimize further preparation of invoice, e-mailing to clients and posting of revenue into the system, thus reducing manual efforts.
- Reporting – The finance department has to prepare various reports for management review, and at the same time reports need to be created for external audit and other regulatory requirements.
RPA can automate the manual swivel-chair activities involved in gathering data from multiple sources to a large extent. Further advance analytics applied to this data can provide better insights, which would bolster the management in decision making.
Another segment where RPA is making significant impact is Logistics and Shipping industry. Automation helps to improve customer service, optimize metrics such as turnaround time and days outstanding as well as improve employee satisfaction. Few of the key processes where RPA can help includes shipment scheduling and tracking, order processing, invoice processing, demand forecasting, fleet management and route allocation. While doing these processes manually the operator spends around 40-60% of time performing mundane repetitive activities such as printing emails, finding order/ load details, log information to company system, validate data etc. The image below depicts a list of processes where automation is making an impact in logistics industry.
(This article has been contributed by Happiest Minds Technologies, exclusively for Sea News)
Sea News Feature, January 4