The Importance of Using Robotic Process Automation in Finance

  • October 26, 2022
  • Elisa Silverglade
  • 8 min read

Key Takeaways:

  • RPAs help finance teams save time and focus on high-level tasks by automating repetitive ones
  • With RPAs, finance teams can take on more tasks without sacrificing accuracy
  • Even though RPAs don’t eliminate costs, they reduce them significantly

Thinking about robotic process automation (RPA) for your business, specifically in finance, is a significant indicator that you’re making the best decisions for your company. 

Here’s why. RPA is simply a better way to do business. 

Take a finance team, for instance. Any finance team does more than crunch numbers – they enter daily financial data, prepare financial statements, perform monthly expense reconciliation, create spending reports, and so on. These are repetitive tasks that can quickly go wrong with a single miscalculation.

An RPA takes over these jobs so your team can focus on more high-level work. And that’s precisely what it did for Palkeet, the Finnish Government Shared Services Center for Finance and HR. 

Palkeet’s finance team – prior to integrating RPA into its processes – had to do all the work manually. Palkeet serves 70,000 individual employees, meaning their manual process was an unsustainable setup, one that was bound to fail. Enter RPA.

Palkeet introduced RPA to its invoicing department for a test drive, and six years on, they have saved 93,000 person-hours, increased productivity by 20 percent, and reduced manual processes by 50 percent. The Palkeet finance team can now focus on more high-level tasks instead of spending precious time on the 490 tasks it’s currently automating. 

Many more businesses can testify to RPA’s impact on their business. Newzoo, for example, boasts 4 times faster end-of-month closing by its finance team and a clear audit trail of finance information – and you can too (if you’re ready to make the jump, that is). 

Still not convinced? 

This guide digs into the benefits of robotic process automation for finance teams and the common pitfalls of using RPA. But before we get to the nitty-gritty, let’s discuss what an RPA is. 

What Is Robotic Process Automation, Exactly?

Robotic process automation involves instructing robots to perform simple, repetitive tasks and automate specific workflows so people don’t have to. These “robots,” though, aren’t robots in the literal sense. It’s more like software designed to automate specific tasks.

RPAs have already solidified their position in fintech with their ability to streamline mundane tasks and get the work done faster and more efficiently. Whether it’s expense reimbursements, budget forecasting, or even basic accounting, RPAs have the edge over manual labor. 

Benefits of RPA in Finance

It’s not surprising that RPA adoption rates have shot up to 20 percent in the last year alone. Here are more reasons business decision-makers are moving towards RPAs in finance to automate simple business tasks.

1. Increased Efficiency

The standout benefit of RPAs is their ability to complete tasks more efficiently than humans. Set your parameters, and you can count on RPAs to get the job done. They can collect data automatically, analyze it, and create detailed reports so you can make more informed financial decisions. 

The best part? RPAs will immediately send you an alert if they have a problem implementing an instruction you give so that you can review the issue manually. This way, you get work done correctly and without error. That’s efficiency. 

RPAs can complete menial processes that most finance teams would like to avoid, and they do it much faster. Finance teams don’t want to copy and paste the same data for four hours straight. RPAs, on the other hand, don’t mind (can’t mind) the task and can do it in half the time – plus, RPAs don’t go on coffee breaks.

2. Increased Scalability

Staying with systems that just don’t scale is a significant contributor to disarray in businesses that are expanding quickly. You want to grow to serve your customers better and have an even better business operations system. This isn’t easy if your finance team has to manually perform accounting tasks on a large scale.

That’s why it’s an excellent idea to bring in RPAs. RPAs make it easy for your team to tackle massive increases in accounting, like tracking payroll for over 2,000 employees, without sacrificing accuracy. 

You can also train new talents and hires to work with your RPA system. Why? RPA systems give your finance team a more defined operational structure, one they can teach new hires to use.

3. Better Compliance Management

Every finance team needs to conduct audits on finance data and systems, disclose problems in finance processes, and provide quarterly reports to the relevant regulatory organizations. To do this, your team has to stay current on the ever-changing regulatory compliance standards

Compliance with these regulations increases consumer confidence in your business, eliminates financial crime, and protects your investors. Get these regulations wrong, though, and you’ll attract unwarranted fines and penalties. 

RPAs are better than manual labor in this regard as well – in fact, 38 percent of business decision-makers say RPA improves business compliance. 

You can program these regulations into RPAs, so the RPAs will follow them as they automate your tasks. This is a great way to ensure you’re on track with compliance, as RPAs have a low (sometimes zero) mistake rate, higher coverage, and little to no human involvement. 

RPA systems also combine data from several sources to increase the effectiveness of financial and regulatory reporting. You can do away with manual data collection and compilation methods, which greatly simplifies financial reporting.

4. Improved Credit Risk Management

Indifferently granting credit limits to customers without conducting sufficient background checks is one of the main reasons for high bad debt rates. Executives can’t be entirely blamed for these rates, of course, as they may not have the time or the necessary information to analyze the credit risk profiles of their clients. An RPA can get the job done. 

Add a new prospect to your client management system, and from there, you can leverage RPA bots to track their credit risk profiles and log them into your credit checking system. Your RPA can then automatically locate pertinent data, such as credit risk score, and save this data in a single database. 

Tasks like this, even though they’re fairly simple, can be tedious and time-consuming without RPAs. The good news is that these tasks are exactly what you should be handing over to RPAs. RPA bots can finish credit risk management processes in minutes.

5. Better Employee Expense Management

Some roles require employees to spend money to work efficiently, which the company will have to reimburse them for. 

The problem isn’t with employees spending money but with the reimbursement systems most companies use. Handwritten expenditure reimbursements frequently cause problems for both employees and finance teams since paper receipts are easily misplaced, causing payments to be delayed. 

The solution? You can introduce employee-assigned virtual cards and preloaded cards your employees can use when making purchases on the job. Your RPAs can then track these expenses and account for them accordingly. This makes reconciliation easier for your finance team. 

Most consolidated expenditure management software has RPAs for this task. You can get one to eliminate disorganized paper trails and enables quick refunds for your employees.

5. More Accurate Financial Forecasting

It takes a lot of planning and grunt work to forecast a financial strategy for the near and long term. You need a lot of financial data and statements before making an educated forecast. That’s where RPAs come in.

RPAs automatically generate budget models from the data they gather when inputting financial data and even carry out variance analysis all at once. They also study historical financial information to create a detailed picture of what you might anticipate your future finances to look like. 

The best part? RPA predictions are most likely as correct as predictions can be with given data. This is because there is a high level of accuracy and no chance of human error. You can be sure you’re getting accurate information for making crucial business choices for your company.

There are clearly many important, significant benefits to employing PRA in the finance world. There are, however, a few downsides to consider before making the jump to robotic process automation for your business.

Potential Downsides of Using RPA

RPAs don’t necessarily eliminate costs in your business. If RPA successfully reduces personnel costs, that’s cost savings in one area of the company – but it also raises expenses for infrastructure and IT software maintenance.

Even the meaning of RPA is somewhat ambiguous – essentially, anything that = can be automated can be an “RPA.” Taking a CSV data file from a mainframe, separating it into records, and then inserting those records into a REST API is technically RPA, for example. This process doesn’t require controlling a GUI, however, and has long been a staple of corporate architectural patterns.

Make the Most out of Your Finance RPA with Techromatic

Automation saves time, helps avoid mistakes, and allows focus on other vital areas of your business. 

Using RPA makes the most sense if your operations revolve around many repetitive tasks, so you can reduce the workload on employees and increase efficiency. That’s the beauty of RPA – less effort, more efficiency. 

If you are prepared to adopt RPA solutions for your financial process, contact Techromatic today. Techromatic helps businesses create, deploy, and manage automation to boost productivity and efficiency.

IT Support by SADOSSecure, Fast Hosting for WordPress