Robotic Process Automation in Financial Processes
For companies in all industries, Robotic Process Automation (RPA) is a way to boost productivity and lower the costs that have been allocated to time-consuming, mundane processes in the past.
Within financial processes, organizations have an incredible opportunity to leverage RPA and reap the benefits of efficient, error-eliminating automation.
What is RPA, and why is it becoming so popular in the finance industry?
Robotic process automation is the deployment of software robots to mimic specific actions humans would take, such as logging into a portal to gather information, or copying data from one application to another. The market often talks of RPA as desktop automation, but with LEKAB and Kofax it’s more a team of smart software robots deployed on a centralized server that can automate any manual task in any application or data source, including legacy mainframe systems, external web sites and portals. This centralized server robot model distinction is increasingly important in large-scale enterprise robot deployments, given it scales infinitely better and is much easier to manage than trying to run software robots on a physical desktop.
RPA is appealing not only because of how effective it is, but also because of how simply and quickly it can be set up and deployed. Traditionally in many companies, the structure of IT has been “command and control” where IT chose, implemented and supported technology for business users. Now, we’re seeing business units such as accounting and finance choosing, deploying and managing their own technology. RPA is an ideal candidate for that.
How is RPA utilized in the finance industry?
In a typical financial process automation scenario, Kofax solutions can attain about 80 to 90 percent automation levels between capture and workflow for mature solutions like accounts payable, and we’re approaching those levels in other areas such as sales order processing, where we’re already well above 50 percent.
In the case of remaining tasks that have historically been difficult to automate, RPA can provide two key benefits:
- Covering automation gaps. Every business has unique aspects to their workflow that traditional enterprise software doesn’t automate, such as customizations or integration with unsupported third-party applications.
- Automating unaddressed manual processes that may not have sufficient volume or scale. Two examples are automating GL account setup or posting an allocation journal entry. On the AP side, companies often have to pull from or send invoices to a portal for AP and AR. You may have to extract only a few hundred invoices a month, so the process remains manual since it would be costly and time-consuming for IT to build an integration. RPA can automate that process very quickly and affordably.
What are the biggest challenges that RPA solves?
One area is fast problem-solving for targeted use cases. RPA can quickly set up an integration layer that’s far more flexible, fast and supportable than custom IT work. This can be applied in AP integration, sales order management and financial close.
RPA also adapts to control processes very well. Processes that are unique to a company with internally-set standards are traditionally difficult to automate because they’re not standard across the industry. There is potential for RPA across the entire accounting and finance spectrum, which is made up of tens or hundreds of thousands of interdependent tasks that need to be performed repeatedly in the same order.
Where are we seeing RPA used in financial processes?
We’ve seen several examples of robotic process automation in action in the financial context. Companies are deploying robotic process automation to request and process quotes and invoices.
The market is ready for RPA, but there is still a lot of hype about the promise of this technology. LEKAB and Kofax are continuously validating the value of RPA with companies both in the Nordics and all over the world. It takes comprehensive, integrated knowledge to identify the specific use cases and deliver ROI. Because we provide both financial process automation and robotic process automation solutions for accounting and finance, we bring the right balance of process expertise along with key capabilities and end-to-end solutions.
What competitive edge will adopters of RPA gain?
We’ve talked about how digital transformation in finance enables organizational agility and cost savings, but the larger story is improved customer service. Automation enables your organization to move workers from routine data entry into higher-value analyst and strategic roles. This applies to procure-to-pay automation in the back office as well as order-to-cash automation in the front office. The clear operational benefits are drivers for providing the compelling benefit of being able to better serve customers with faster, better and more valuable information, resulting in true business transformation.
*An earlier version of this article appeared on the Kofax blog.
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