Much has been written in the last year about robotic process automation (RPA), and for good reason. By facilitating broader integration of disparate financial systems and software applications, RPA promises more efficiency to finance and accounting organizations. But are robots a substitute for accountants, as some articles have attested? Not by a long shot.
RPA captures, manipulates and interprets transactional data flowing from myriad IT systems and applications, effectively taking these repetitive tasks from accountants. That’s a good thing, as it frees up the accounting staff to become strategic accountants. The “robots” liberate accountants to do what they have longed to do — make sense of the financial data to improve business decisions.
RPA is just the latest iteration in a long progression of F&A software tools designed to improve efficiency and data accuracy, including our own here at BlackLine. RPA extends the automated functionality of ERP systems beyond the range of application programming interfaces (commonly known as APIs) and simple object access protocol, which are used to integrate the ERP system with other IT applications. Instead of the customary weeks it takes to link these systems, RPA pares the time down to a matter of days.
There are some studies, such as that by the Hackett Group, that suggest that automated tools may lead to a reduction in headcount. But robo-accountants are not actual accountants. Despite the enormous power and promise of digital solutions, there will always be a need for the human connection. Robots may replicate what people do, but they are unemotional, have no intuition and cannot be motivated in a common cause. They’re simply machines making routine work easier and more efficient.
Turning dislocation into transformation
Today’s accountants should not fear automation; rather, they should embrace these tools to become strategic accountants. When machines replace traditional forms of work, they simultaneously open the door to other options. People are liberated to be more creative, engaged and productive. Let the robots handle rote administrative processing. Accountants’ skills are far too nuanced to squander on such tasks.
A case in point is the competitive advantage of extracting deeper meaning from internal and exogenous financial data. The internet is inundated with millions of data sets that may have import in business decisions. Software can narrow the field, but someone has to interpret the data to determine where best to grow the business or pull back.
Accountants can perform this function, filtering and analyzing internal and exogenous business-related data to assist the CFO in making more informed and agile decisions. Armed with the accountants’ analyses, the CFO can make more astute bets on where to invest the company’s capital and where to restrict it.
The office of finance has always been the nexus of financial and other business-related data. In today’s blisteringly fast 24/7 global business environment, where change can happen overnight, this information is a vital currency that can improve market share, reduce strategic risks and widen margins. The problem is that CFOs have relied on purely historical business data in making resource allocation and other financial decisions. Accountants are an untapped resource to help make rapid sense of today’s numbers to ensure the company remains on course to achieve its strategic objectives. If this is not the case, the CFO has an enhanced opportunity to nimbly change direction to seize more profitable business opportunities elsewhere.
Do CFOs require such assistance? You bet they do. In a 2016 survey of 122 CFOs at large companies by Deloitte, the respondents stated that they spend more than one quarter (27 percent) of their time on company strategy. An equal amount of time is devoted to operations, identifying ways to improve organizational efficiency, balance costs and manage issues related to talent. Less than one quarter of the CFOs’ time is focused on traditional finance functions, such as accounting and financial reporting and control requirements.
The upshot is clear: While CFOs still oversee the nuts and bolts of accounting, their primary task is to determine the impact of wide-ranging financial and business data on the strategic plan. As the CFO’s role transforms, so must the activities of accountants.
Value added service
Where else can today’s accountants become tomorrow’s strategic accountant? They can undertake forensic accounting procedures to analyze financial information for use in legal proceedings, help ensure compliance with fast-evolving global regulations, assist the due diligence into the financials of an acquisition target, and assess the financial value of buying, building or renting technology.
Accountants also can help their colleagues in financial planning and analysis develop more accurate and timelier forecasts. They can hold their colleagues across the business accountable for the backup behind the numbers they’ve provided. And since they have the rare ability to examine the books and know instinctively when something does not appear right, they can be an invaluable resource in discerning fraud — the enemy of all corporate reputations. Robots may be able to find irregularities, but they cannot apply years of knowledge, expertise and intuition to look for the reasons behind the anomaly.
The bottom line is that accountants should welcome RPA as just another arrow in their quiver, one of many assisting their ongoing transformation into strategic accountants. Their work and their lives are better for it.