Robotic process automation or RPA, is already used in manufacturing processes to assemble everything from cars to small industrial components. This innovative technology is now making its way into the financial world and promises unique changes in the financial system.
RPA is a software tool that uses bots to mimic incredibly labor-intensive, repetitive human work. These software "robots" can follow specific rules and action sequences to automate tedious, repetitive processes that typically require human workforce intervention. The bots use the same processes and follow similar steps to perform the work done by humans. In finance, the RPA can automate tasks by copying and repeating user actions, enabling human-like automation.
This article explores the benefits of RPA in finance and its applications.
Use Cases of RPA in the Finance Industry
Managing finances often requires a diverse set of software systems, translating into repetitive work that RPA can do. Some of the applications of RPA are as follows:
Purchase order (PO) processing: It is a routine task for a finance team and involves creating, approving and sending the purchase orders to suppliers. The process can be tedious, time-consuming, and subject to human error. However, it can be automated using RPA. RPA can generate purchase orders by extracting data from multiple sources such as inventory systems, email requests etc. RPA can also route these purchase orders to appropriate stakeholders for approval based on predefined criteria such as category, value of PO, vendor, etc., send notifications to approvers, and even handle exceptions or escalations where needed. These RPA bots can also send the approved POs, update purchase order status and even track delivery and payment details.
Invoice processing: This is usually a common task for the finance department in any business. It involves receiving or sending invoices and validating and paying or receiving the invoice value to suppliers or buyers. Invoice processing can be tedious and prone to human error when done manually. However, RPA can automate the steps involved in invoice processing and follow the steps to generate and send invoices to buyers. It can scan and extract data from a supplier invoice and validate it. RPA can also update the systems to reflect the purchase or sales invoice within the accounting or ERP systems. RPA bots can also send confirmations via emails or alerts to relevant suppliers or, buyers and stakeholders.
Account reconciliation involves comparing and matching transactions and balances in the accounting records with bank statements or buyer/supplier accounting records. It helps ensure the accuracy and completeness of the financial statements and is used to detect errors, frauds or discrepancies. Manual reconciliations are time-consuming and can be prone to human errors. RPA bots can be programmed to follow the same process and steps as humans to automate the account reconciliation system. RPA can extract data from multiple sources, validate data and update the accounting systems with reconciled data and status. RPA bots can also send out the reconciled statements to relevant stakeholders for further processing.
Tax calculations: It involves computing the tax payable owed to the government and is a big part of any company or personal finance. Tax calculations can be complex, time-consuming and prone to human error. However, RPA can help automate these processes by extracting data from various sources such as financial transactions, receipts, invoices, tax forms etc. RPA can also check the data for errors, duplicates or discrepancies and check the data against tax laws, regulations, previous returns, compliances etc. By following rules or protocols, RPA can generate and send tax reports to the relevant stakeholders, tax authorities, auditors, etc., without human intervention.
Benefits of RPA for the Finance Industry
- Improved efficiency: Robotic process automation can significantly reduce human error. It can increase processing speed, reduce helpdesk queries, execute multiple processes simultaneously and formulate feedback faster. RPAs are available 24/7 and improve efficiency and enhance customer satisfaction.
- Seamless usability: RPA is a lightweight enterprise technology that can easily sit alongside any existing technology. RPA is built for change and agility and is highly flexible. It can create a robust audit trail for all the activities it performs, making it easier to monitor the process and take corrective action when needed.
- Cost savings: Typically, the cost of RPA bot licenses are lower when compared against the cost of human workforce. The ROI becomes apparent and improved productivity and reduced labor costs leads to cost efficiency.
- Improved reliability and accuracy: Human errors can lead to costly grave mistakes. The operational risk of manual processes makes it evident that it's essential to invest in right solutions that help improve reliability of systems and processes.
Conclusion
Digital transformation for financial services using RPA is the key to overcoming workflow bottlenecks, challenges of repetitive tasks and reducing or eliminating human errors. Partnering with a financial software development company with exceptional RPA solutions can help automate the finance business processes seamlessly.
Author's Bio:
Kaushal Shah manages digital marketing communications for the enterprise technology services provided by Rishabh Software.
