Author: P.J. Yates
Date: Wednesday, 24 August 2022
Read Time: 3 Minute Read
Across all industries, company sizes, and locations, every organization’s finance processes share many similarities. Every business must make sure that its financial reports are accurate, manage cash flow appropriately, and complete other essential finance tasks to stay operational.
All financial processes have one or more core purposes: efficiency, accuracy, timeliness, and regulatory compliance. Regulators and investors may be particularly critical if reporting errors or delays occur.
For a few years now, Robotic Process Automation (RPA) has been associated with increased efficiency, accuracy, and compliance in finance departments. By automating processes that were previously manual, RPA reduces the number of controls needed, errors in reporting,…
Core finance processes
The following five major finance functions can each achieve significant benefits from implementing RPA.
Accounts receivable is responsible for the following processes: generating accurate invoices based on incoming sales orders, and collecting invoice payments. These procedures, including as new client accounts creation, producing correct invoices based on incoming sales orders, and collecting payment, are all essential to ensuring enough cash flow and company liquidity.
This function generally entails a number of time-consuming, human processes that can cause cash inflows to be delayed and/or revenue to be lost. RPA is important for speeding up these operations by directly accessing numerous sources of information, reconciling amounts to verify the accuracy, and automating repetitive activities.
Validation and payment of vendor bills for goods received are critical to assure the validity of acquired items, the accuracy of billed amounts, and the timeliness of payments in order to avoid late fees and interest charges. The accounts payable department often spends a considerable amount of time on various redundant tasks, including creating new vendor accounts, data entry from invoices, cross-referencing purchase orders with billed prices, and authorizing payments. With RPA technology, automating certain Accounts Payable processes – such as modifying vendor records, extracting invoice information, or validating amounts – can improve workflow efficiency and help to avoid overpayments.
A crucial role of the finance department is to manage the general ledger close process monthly and generate financial reports that are both timely and accurate. Even though many processes can be automated through a finance enterprise resource planning system, there are still several manual steps involved in repetitious tasks like reconciliations, journal entries, and external reporting–all of which occasionally cause errors. To increase operational efficiency as well as timeliness and accuracy, RPA can automate these manual procedures.
Financial planning and analysis (FP&A)
Budgeting, forecasting, and management reporting are important roles in allowing companies to make good commercial judgments based on up-to-date and quality financial data. Instead of focusing on financial analysis and strategic planning, the FP&A department typically focuses on sourcing, aggregation, and formatting data. Finance experts can automate these manual data-related chores using RPA, allowing them to focus more on value-add work.
Cash management is an essential treasury function that ensures businesses have the necessary cash on hand to keep operating. Cash reconciliation and reporting procedures are particularly important in determining the present cash position at any moment throughout the business’s operations by reconciling consolidated bank account balances with money shown on the balance sheet. To increase the accuracy and timeliness of cash position reporting and forecasting, as well as to make better use of limited financial resources, RPA automates these manual consolidation and reconciliation processes.
Critical for finance
5 essential finance functions for any business organization, including repetitive daily procedures are excellent candidates for automation. RPA solutions can streamline these processes, making them more efficient and accurate while ensuring compliance with industry regulations.