Robotic Process Automation in Accounts Payable and Accounts Receivable
MHC Marketing January 20th, 2020
Robotic process automation, or RPA, is transforming the way businesses handle their accounts payable and receivable. This revolutionary technology enables enterprises to design computer software to imitate the actions of an employee interacting with various digital systems in the company.
It can integrate these actions into the more extensive computer system and seamlessly merge them to work in tandem. You can program the system to execute a plethora of processes, including email response, data entry, and transaction processing. However, RPA works best when imitating human actions that are repetitive and predictable.
RPA is particularly useful when implemented in retail, finance, human resources, healthcare and other similar industries. Within these fields, RPA is quickly becoming the industry standard for companies looking to maximize efficiency. One report predicts that the RPA market will reach $2.9 billion by 2021. If this prediction is any indication, RPA will continue to gain popularity across a wide range of industries.
This exponential growth will result in an increasing demand for companies that can develop superior RPA systems. With more and more companies adopting this software, the gap will widen between the companies that use RPA and those who choose to continue without it. As a result, the latter will likely find themselves falling further and further behind in their industries.
What Is Robotic Process Automation?
Robotic Process Automation uses computer programs, rather than human employees, to oversee finance, accounting and general business processes. These computer programs, called software robots, use the entire computer system to capture and analyze data and operate systems as a person would. To perform the desired task, they collect all the necessary information, interpret it into useful tools, communicate with other aspects of the system and initiate the appropriate responses. The robots can do all of this in a fraction of the time it would take a human employee. Plus, the computer doesn’t sleep, collect a salary, take vacations or make mistakes.
While this type of automation might appear to threaten the security of specific jobs, it benefits your employees in the long run. Now that your employees are no longer performing repetitive, low-value tasks, they are free to learn and master more complex, high-value skills. RPA allows your company more time to focus on employee growth, customer service and solving business challenges.
Another major benefit of RPA is that it does not change the existing infrastructure or processes you have in place. Software robots can integrate into any system because they are easily programmed and reprogrammed. With some programming, you can instantly multiply the robots as you go. RPA allows your system to improve continually since the robots are always reporting their progress. With each system you run and modify, the larger system gets smarter and more complex, resulting in an efficient, personalized network.
Since accounting requires a large amount of tedious, repetitive tasks, a robotic accounting department can perform much of the work.
How RPA Works
If you think your business would benefit from implementing RPA, you must first understand what to expect once it’s integrated into your system. While there are a few simple tasks you can program the system to perform right away, robust and reliable RPA takes time. You must allow time for both the program and the business to adjust to the changes and evolve. Just as an employee needs time to learn the intricacies of their new role, RPA needs time to learn and make corrections.
The industries in which RPA is most effective — food, pharmaceuticals, healthcare and finance — also happen to be the industries that are the most regulated. It’s essential to evaluate how RPA relates to compliance for your business and continually monitor the regulations that affect your company for changes.
If you take the proper steps toward compliance, a solid RPA system can offer protection against mistakes that might cause compliance issues. Software robots are less likely to make the same mistakes a human employee would, so your company is less likely to make a mistake that could jeopardize it.
The use of robotic process automation in finance is uniquely transformative. Since accounting requires a large amount of tedious, repetitive tasks, a robotic accounting department can perform much of the work. For example, if an employee in the accounting department of a company that does not utilize RPA is responsible for uploading the company’s invoices, the employee would typically assess and process each one manually. Depending on the size of the order, this process could take anywhere from three to 10 minutes per invoice.
If the company had RPA in finances and accounting, the software robots could have collected the invoice, processed the key information and uploaded it to the right folder. The RPA system could have completed the entire process in about two minutes, with only a few instructions from an employee.
When using RPA, critical changes in accounting processes also occur in Accounts Payable and Accounts Received, including:
Product orders: RPA can confirm the order is cross-referenced with the product catalog to ensure the product’s quantities, weights and codes are accurate.
Supplier management: RPA can improve the speed of supplier acquisition, invoice uploads, dispute resolutions and much more.
Analytics and reporting: With RPA, you can quickly retrieve any document based on platform content and events.
Catalog management: RPA allows your company to upload and manage various product catalogs with minimal instruction.
Approval Processes: RPA enables approvers to monitor all the invoices the company has received. The software robots can collect all the invoices and check them against the document logs.
What RPA in Process Management Can Do for Your Business
Most accounting departments rely on outdated, ad hoc processes to get their work done. They’re often understaffed and drowning in vast seas of paperwork. Standard accounting practices, like sending emails, stuffing envelops and filling out reports, are repetitive, tedious tasks that often lead to employee burnout and low morale.
However, the repetitive nature of these tasks makes them a prime candidate for RPA. With proper programming, software robots can perform these duties in a fraction of the time with almost no mistakes. In turn, this RPA frees your accounting department up to nurture relationships with valued customers, contact costumers with outstanding balances and perform duties that add more value to the company. RPA can also:
Offer credit score alerts: With RPA, you’ll be able to monitor the credit score and history of your customers. This ability is critical to avoid major liability issues. The software can monitor, predict, and advise on how to navigate possible disasters. Without RPA, a customer could come close to declaring or even officially declare bankruptcy, and you would lose the ability to collect anything they might still owe you. RPA can help stop major threats before they happen by setting parameters to the code. When a customer’s credit score drops below a certain threshold, it will alert you to the problem.
Automate emails to clients: Sending consistent, reliable and polished emails is an essential aspect of any company. When written or sent manually, emails may contain typos, content errors and other issues that you probably don’t want your clients to see. RPA invoice processing eliminates the possibility of errors. When a client makes a purchase, you can program your system to send them an email with the invoice attached automatically. Then, if you haven’t received a payment within a certain amount of time, you can program the system to send another email with a payment reminder. Remembering to send invoices and follow-up emails to clients is a tedious task that any automated system can perform flawlessly and with ease.
Extract information with accuracy: Companies often have to deal with a lot of information and data. From employee stats to client lists, it’s easy to get lost in a sea of information. Without the proper systems in place, essential information can be challenging to search for, find and interpret. With RPA, it’s easy to find information, since the program has already stored it in the right place. Also, when there are discrepancies or missing info on invoices, robotic processing utilizes third-party databases to accurately collect information to streamline Accounts Receivable and Accounts Payable processes.
Escalate accounts when necessary: Invoice disputes are often a costly issue for companies. The longer they remain in dispute, the less likely they are to be paid in full or paid at all. To avoid delays in the potentially costly process, you can program your RPA to give priority to any account that goes into dispute instantly. The system can promptly notify the appropriate employees and ensure they deal with the issue in a timely, professional manner. When the RPA can successfully differentiate between high-priority and low-priority issues, you’re more likely to resolve the dispute quickly and beneficially.
Automation can improve your company quality control, lower operation costs and increase efficiency with just a few simple changes that won’t affect your current system.
The Outcome of Switching to RPA
Making the switch to RPA can seem like a daunting task. Relinquishing tasks to automation can feel like giving up control, but in reality, it is giving you even more control than before. While it might be challenging to implement and embrace the changes at first, it’s important to make sure your company is keeping up with the times. One global survey found that 53% of respondents had already begun their RPA journey. In the case of automation, your company is either continually learning and growing or falling behind.
Automation can improve your company’s quality control, lower operation costs and increase efficiency with just a few simple changes that won’t affect your current system. With such a minimal investment required, there’s no reason not to make the switch.
Here are a few other benefits to RPA:
Lower Costs: When it comes to speed, accuracy and minimizing errors, RPA is the leading method for enterprise optimization in every industry. With RPA, you can keep track of your inventory, structure your point-of-sale systems and organize your reorders and vendor shipments for a fraction of the cost. The software can also input client information and send it to your network without the help of employees. Any way you look at it, automation saves money.
Improve Quality Control: RPA can also help improve quality control in all aspects of your business. When software robots, rather than employees, are carrying out the more repetitive tasks, the possibility for error is reduced almost to zero. This then clears your employees up for learning and carrying out tasks that increase the quality of service your company can provide.
Optimize Efficiency: Humans aren’t always efficient, but computers are. Integrating RPA into a company’s workflow can substantially increase its efficiency. RPA can lower costs, minimize mistakes, improve quality and boost productivity, resulting in an overall increase in company ability to function. It also frees your employees up to work more efficiently when they don’t have to worry about completing several tedious tasks throughout the day.
Promote Strategic Decisions: From sales and billing reports to employee stats, RPA can provide the company with information on how to improve. When you’re running a fully automated system, it can record all of the information going in and out of the system. You can then utilize that information to better both your company and the system itself. As it identifies all the information about your enterprise, it can also identify any flaws in the system. You can use this information to improve operational processes with data-backed, actionable solutions.
Improve Compliance: Errors can happen to any company, but the chances of a costly error occurring in a company that is equipped with RPA is substantially lower. The wrong error at the wrong time can be devastating for companies in highly regulated industries, such as pharmaceuticals, food, healthcare and finance. These industries have such tight regulations, that one major error can bring down an entire company. Luckily, with RPA, errors are eradicated because the processes that cause the most mistakes — repetitive, tedious tasks — are completed by computers and fully automated.
How Do I Get Started?
Robotics in finance and accounting can be an overwhelming concept. Luckily, MHC offers software, services and information to help ease the transition.
With no obligation required, MHC offers a free demo that will show you exactly how much better your company could run with automation software. MHC’s software and services can operate with any pre-existing application or system. We can easily integrate with one or more line of your business’s applications, providing a true enterprise solution. We offer all the functionality of the big guys — at a fair and equitable price.
With MHC, you don’t need an army of IT staff to maintain our system. Our systems are built by business people for business people.
For information about automation software and services, get in touch with us today!