Robotic process automation comes to accounting

Robotic process automation is playing a larger role at companies, including in the accounting and finance area, but many executives feel more needs to be done, according to a new report.

The report, from the consulting firm Protiviti, found there’s a large gap in who involves accounting in creating RPA business cases, with 74 percent of companies who are “leaders” in RPA involving finance and accounting, compared to 42 percent of intermediaries and only 20 percent of beginners.

“A lot of RPA initiatives often start with accounting,” said Angelo Poulikakos, a managing director at Protiviti. “Accounting contains a lot of processes that are high-transaction, repeatable, well structured, rules-based processes that lend themselves to robotic process automation. A lot of times RPA initiatives also start with accounting because accounting oftentimes rolls out to a CFO, and it catches the CFO’s attention that you can have a ton of cost savings through the use of RPA. But we see a lot of the leaders in this space around RPA will typically start with accounting. They’ll see where RPA can be leveraged oftentimes in their shared services organizations. Many times shared services organizations are established to help deal with that high volume, and because they’re true cost centers, those shared services leaders are always looking for ways to improve the efficiency of their operations.”

For the report, Protiviti and ESI ThoughtLab surveyed 450 executives, 78 percent of whom came from organizations with at least $1 billion in annual revenue. It found that, on average, companies are investing $5 million in RPA technology in the current fiscal year, with the largest organizations spending $10 million to $20 million annually.

Protiviti found that 40 percent of organizations are still having trouble prioritizing potential RPA initiatives, while 30 percent believe their firms are taking a “scattershot” approach that hinders their pursuit of the best applications of RPA for their business.

“One thing we have found is some of those processes that are repetitive, high volume, rules based, they can be a bit mundane, and sometimes those job rules can be fluid, so there’s a lot of cost in constantly having to onboard new resources,” said Poulikakos. “RPA can provide a level of stability in dealing with those types of tasks that are mundane. It really gets the accountant to focus more on those higher value activities instead of the repetitive work.”

Protiviti hasn’t found RPA taking over accounting jobs, although the technology is automating more tasks.

“From what we’ve seen in accounting we haven’t necessarily seen bots take over the jobs of accountants, but one of the things it’s definitely done is repurposed some of those roles so that now they’re more focused on exception handling rather than the routine processing of transactions,” said Poulikakos. “At the same time, for organizations that have outsourced or offshored a lot of their transactional operations, where they’ve built delivery centers offshore, they might use third parties that offer that. In cases when there’s a headcount reduction, there’s not always an immediate attempt to replace that position. But I think people are relatively safe in the U.S.”

“With some of the finance organizations that you see fit within corporate headquarters and those organizations are utilizing RPA, a lot of times their role isn’t really taken over by a bot, but their role might change based on the impacts of implementing RPA,” said Cassie Putnam, a director at Protiviti. “A lot of that will be some of the exceptions handling, so as a bot performs a process, there’s going to be areas of that process that need some subjectivity or judgment, and so that accounting person or finance person may be responsible for performing an action based on results coming from a bot and then passing that back off to the automated process. There’s still that element of needing that knowledge and skill set that you have with your accountants to some extent. You’re never going to get a full, 100 percent automated process with a U.S. finance and accounting organization. There’s usually some complexity and judgment that’s involved with those processes that you will need that skill set for.”

Auditing would seem to be an area where RPA might come in useful, but Protiviti hasn’t seen much evidence of that yet. “I think in audit there’s actually not a ton of high volume, repetitive work that lends itself to RPA, where the driver would be reducing headcount,” said Poulikakos. “I think in audit there’s a different lever that RPA can be used for, and that is reducing the cycle time in performing certain types of auditing or performing certain types of control testing. It can also be used as a lever to evaluate a larger population of transactions. Auditors oftentimes take sample-based approaches to review documentation, to review accounts. Whatever they’re reviewing, they’re always taking these statistical samples, and they’re doing that because they have time constraints. There are certain types of audit tests and procedures that might lend themselves to RPA, so an audit department that can identify those now can use RPA as a way of looking at the full population of transactions, or if not the full population, just a much more significant amount than the traditional samples that an auditor would look at.”

“I also allows them to initiate that review more frequently than they have in the past as well, if it is automated,” Putnam added. “It’s something that if maybe they were looking at it twice a year, they could go back and look at it every quarter or even monthly if they wanted to.”

The study found several benefits associated with the motivation to invest in RPA. According to the survey respondents, they included increased productivity (22 percent), better product quality (16 percent), strong competitive market position (15 percent), customer satisfaction (12 percent), greater speed to market (11 percent) and trimming costs (3 percent).

RPA benefits

However, a number of obstacles remain to RPA adoption, according to the report. Forty percent of organizations cited an inability to prioritize potential RPA initiatives, while 30 percent found that a scattershot approach has made it difficult to pursue the best applications of RPA. Other challenges include concerns associated with cybersecurity (40 percent) and regulation (30 percent).

The lack of available talent is another obstacle, with 24 percent of executives citing this as a significant barrier. Some of the leading companies are making an effort to train their existing employees in RPA (71 percent), partner with consulting companies or tech providers (53 percent), and identify new sources of talent outside of their organizations (40 percent). Protiviti plans to host a webinar Tuesday to discuss the findings in detail.

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