With each blink of the eye, technology and what it can do for business seems to advance. From robotics in manufacturing to machine learning, business efficiency is often at the forefront of these innovations. If you ask a passerby where these technologies are being used and in what fields they have the largest impact, though, it’s unlikely they’ll mention finance.
Despite this lack of awareness there is a tremendous opportunity for technological growth in finance functions. The key is knowing where and when to use it, as well as how to implement it properly for the current day and for the future. So, how can technology, or more specifically, Robotic Process Automation (RPA), enhance financial operations?
What is RPA?
Before the overarching questions can be answered, an understanding of RPA must be established. The word “robotic” likely brings to mind automotive factories—or “The Terminator,” for imaginative types—but in this case, it refers to software.
These software tools are used to partially or completely automate certain human tasks, namely those that are rule-based and repetitive. They are taught to replicate the paths of actual humans, thereby eliminating the need for low-value work to be done by employees.
The Benefits of RPA
By eliminating or reducing the need for people to perform monotonous, low-value actions, opportunities are created. Those individuals now have the freedom to contribute at a higher level and their newfound time can be allocated to business tasks that require more thought and analysis that, as of now, is better suited for humans.
Simultaneously, RPA increases efficiency by being more accurate than humans can be and it expedites tasks by running consistently in the background. It is commonly said that time is money, and RPA can save plenty of both by operating more efficiently, expanding the value-added roles of employees, and reducing the need for monotonous—and expensive—human work.
When to Use RPA
The first factor in this two-part formula has a seemingly simple answer—as soon as logistically possible. Don’t let the unassuming nature of that answer fool you as there are some key steps to be taken during implementation.
It is wise to start with the basics—jobs that are easily automated and have high turnover rates. These will lend themselves to the smoothest transition, allowing you to ease the nerves of employees by leaving positions empty when an employee resigns rather than actively eliminating jobs. It also creates a foundation on which further implementation can be built and any issues can be ironed out on a manageable scale.
Another part of this implementation process is the necessity to retool your business to the new technology rather than trying to haphazardly piece together technology that fits your business. This distinction is vital, as it facilitates integration and sets the business up for future RPA success.
Where to Use RPA
As RPA becomes more advanced and begins to blur the lines between AI, its potential applications will increase. For the time being, there are a handful of finance functions where RPA excels and a few where it does not.
For example many finance functions that fall under accounting, AP/AR, and payroll can be easily automated while functions that require more free thought and human interaction – business development and customer relations – are more difficult to automate. While certainly not comprehensive, figure 1 illustrates various business functions and their ease of automation.
Generally, the more simplistic the task the better suited it is for RPA. Variables and more complex decision-making can undermine the effectiveness of the software.
Activities that involve collecting and transferring data are prime examples of where RPA can be implemented to improve productivity and inspire increased ROI. Tracking receipts, generating and paying scheduled invoices and other specific tasks where a defined order of operations takes place prove to be the best “wheres” to use RPA.
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The list of such financial functions is extensive already and will continue to grow as the technology advances. It’s important to evaluate your business as it is—unique and full of its own RPA applications—as there are no one-size-fits-all formulas. Instead, through planning and perhaps small amounts of trial and error, develop your own system for where and when to use RPA.
Already, automation is shifting the landscape of all businesses. It’s projected that approximately 80% of large businesses will be using RPA within four years. What once was an expensive- yet-limited tool is now a mainstream must for organizations seeking to increase efficiency, productivity and ROI. RPA may be the future, but it is also very much the now.