Accountants leverage RPA amid coronavirus
Robotic process automation has been spreading across accounting and finance departments, according to a report from the Institute of Management Accountants. That trend may accelerate as companies deal with the novel coronavirus pandemic and look for ways to cut costs.
The report aims to help finance professionals start using RPA to speed up tedious manual processes, increase the accuracy of routine transactional processing, and free up their time to focus on doing more value-added work.
“What we found is that nearly all enterprises that begin RPA start in the accounting and finance function,” said Loreal Jiles, director of research, digital technology and finance transformation at the IMA, who wrote the report. “Generally finance and accounting professionals are performing those tasks that are the most suitable for robotic process automation technology. That means they possess certain characteristics, like they’re routine and they’re rule based. The routine nature is really just a function of performing cyclical activities daily in some instances. They’re rule based so defined criteria exist.”
The trend is much broader reaching than just on the management accounting side, she noted. RPA is also being used in public accounting firms, who are leveraging the technology for performing audits. Jiles distinguishes between RPA and artificial intelligence, although AI can work hand in hand with RPA.
“Traditional RPA generally doesn’t have much [artificial] intelligence incorporated in it,” she said. “It’s designed to automate rule-based activities where no judgment is required. And if judgment is required, it’s a safely limited set of rules that you can build into a decision tree. However, what the future of RPA is for finance and accounting, and really for all forms of processing, is intelligent RPA. Intelligent RPA is where you marry it with artificial intelligence, and that can be in the form of intelligent OCR, optical character recognition. It can be in the form of what some call ‘IQ bot,’ where the bot is learning as it performs the task and becomes more accurate with transactional processing for invoices and other things. So there’s the traditional RPA world, where you’re not using artificial intelligence, and there’s what we call intelligent RPA, and that’s where you’re able to marry AI with the actual rule-based aspects of the technology.”
Larger companies are probably ahead of smaller organizations in adopting RPA technology, but smaller businesses can benefit from the technology to help relieve the stress on their overworked finance and accounting employees.
“They may have a 10-person department trying to do the work of 30 or 40,” said Jiles. “What RPA can do for those small and midsize organizations, for a minimal cost relative to some of the other emerging technologies, is allow them to be more efficient and not have to focus on the manual work, and to be able to focus on strategic decision support for their organizational leaders. I think the adoption rate is definitely significantly higher for the larger enterprises, but I’m hopeful and optimistic that we’ll start seeing more of a shift toward small and midsize organizations that are often more budget constrained and stressed for resources.”
The COVID-19 pandemic may create more of a need for companies to use RPA technology to perform the jobs that have been eliminated as a result of the economic downturn and the cash squeeze at companies trying to cut expenses.
“I think you’ll see two views,” said Jiles. “You’ll see one view where larger enterprises in some instances may reduce their investment in some of the emerging technologies because they’re too strained, so some of the larger enterprises may actually reduce their investment while not eradicating it altogether. What we’ve seen with the midsize organizations, though, is that they’re accelerating their adoption of RPA because they have to release some of their employees or they need to get much, much more done. They need to.process more data in a shorter time period as a result of the pandemic.”
Even in those companies that haven’t been laying off employees, the technology can provide greater cost efficiency.
“RPA is proving to be a beneficial tool for a couple of reasons,” said Jiles. “One is it’s not as expensive as some of the other digital technologies to implement, and there is a shorter implementation time as well with RPA, and it’s faster to learn. There are a host of employees and business professionals that embark upon a data analytics or data science journey, and it takes them a year or two to progress along those journeys. With RPA, they can kind of climb the learning curve within one to three months, depending on how much time is available to them. In that scenario then, for much less investment, utilizing the resources that they already have in-house, they’re able to just spend on license costs in some instances.”.
Jiles is encouraging business professionals, especially management accountants, to start adopting RPA technology, even if it’s just at the individual level for their own work. “For business professionals and management accountants, having RPA in their toolkit will allow them to transform the way they perform their own jobs individually,” she said. “The tools are out there and available. The training is free from most of the larger and leading RPA companies, so employees can go and learn how to develop these skills free using the same quality of training materials as larger enterprises are using in their programs.”
In conjunction with the report, the IMA is offering four courses on RPA approved by the National Association of State Boards of Accountancy. “If someone wants to get started, they can start those four courses as well, and they are certainly likely to walk away with a better knowledge and understanding of the technology,” said Jiles.