Overview - Automation
In this era of digitization, automation has facilitated growth and helped businesses expand their service offerings as they look to scale. It has empowered businesses to optimize their internal resource allocation and enabled them to scale with improved customer experience.
Automation is changing the face of every enterprise. Business processes internal or external always have the scope of transformation via strategic automation. The application areas are varied ranging from manufacturing and utilities, to healthcare and the financial industry where automation imbibes speed, accuracy, and reduction in operational costs. In this article we elaborate the use case of automation within the accounting industry.
RPA and its merits
Robotic Process Automation (RPA) software being the sub-set of Business Process Automation, is an umbrella term used for technology that enables activities and workflows that make up a business task with minimal human intervention. At the core, an RPA system imitates human interventions that interact with internal IT systems. It is a non-invasive application that requires minimum integration with the existing IT setup; delivering productivity by replacing human effort to execute routine or repetitive, mostly mundane tasks.
RPA is most effective when working with consistent and highly structured data sources. It is transformational, when placed on top of robust and streamlined processes & builds momentum by performing repetitive, manual financial and accounting processes.
How RPA is being used in the accounting Industry?
Apart from acting as the glue to link isolated systems, these smart and flexible holistic solutions serve the dual purpose of automation as well as integration bringing in benefits such as sustainability, flexibility and operational efficiency.
RPA is radically transforming the established business models & operations of CPA firms. Successful adaptation to RPA has bought in numerous opportunities to CPA firms in terms of reduction in error rate, turnaround time as well as improvement in services and compliance. It has served as a practical tool to handle most of the high volume, lower-value tasks with high precision.
For accounting purposes, RPA is used to handle the bulk of transaction processing like vendor invoices, financial closes and reconciliations. They greatly help in reducing the transactional data processing, routine and labor-intensive tasks such as data entry, bookkeeping and compliance work, and allows accounting professionals to focus more on value added services to their clients.
Accountants are using RPA successfully today for a variety of tasks: accounts payable, accounts receivable, financial close, financial planning and analysis, expense management, and populating certain tax forms.
Exploring Alternative Solutions
RPA may not always be the operational panacea for the CPA firms despite having many known benefits. When an automation effort is limited to just task automation rather than end-to-end process automation, firms may not realize the complete benefits of RPA and the ROI could be somewhat limited as well.
Practically, there will always be a volume and cost threshold below which RPA may not be an economic solution. Investing and maintaining it could be expensive. Additionally, RPAs function best when processes remain uniform and data formats don’t change. However, the limitations of RPA arise when underlying processes are random & change dynamically. If RPA solutions encounter instances that deviate from its programming, it can result in data errors and delays.
So, do CPA firms have to make a wholesale change to their legacy solutions to ensure firm-wide consistency? Not always. Certain level of integrations and data structure modernization can help transition a firm into an RPA ready environment.
CPA firms typically operate in a diverse, hybrid tech environment. They are normally beset with myriad internal and external challenges on the technology front, despite investing in best of breed solutions. Frequently firms in this industry have grown through acquisitions and end up with various technology platforms with similar functionality. In addition, multiple data sources that are not integrated creating data silos impacting other crucial operations of the organization. Furthermore, the firm’s practice management solutions don’t seem to cope well with the demands of the other departments such as business development, marketing and HR. With many heterogeneous and isolated systems, it becomes quite a challenge for firms to pull out and access their client’s crucial data through a single unified interface.
Transitioning to an efficient, effective and scalable digital platform that allows synchronization of master records and transaction data through effective integration with many disconnected systems should be the consideration. The goal should be seamless connectivity to your crucial client data in a single view. In short, you should not have to hunt through multiple systems to view your client data.
The promise of a single provider suite of solutions has not come to fruition to date. Those who have attempted the single provider suite path, have been struggling with subpar components of the suite even after a hefty investment. Firms are pivoting back to acquiring best of breed solutions for their specific tasks and departmental needs. The growth in specialized cloud app purchases by firms has also accelerated as they are mainly subscription based and easily consumed. This trend will certainly continue not only for CPA firms, but businesses in general, which brings up the question of data connectivity needed for seamless operations. Firms now have databases locally or in a private cloud for solutions internally managed and data in various private/public clouds for the subscription apps they utilize. Most firms cannot afford to make a wholesale change of their solution set. It is not only a very expensive undertaking but a very disruptive one to make a wholesale change. In most cases firms need to integrate using automation, in order to achieve interconnectivity and data flow between the various solutions. Although sometimes misunderstood, RPA will not be the solution to solve the interconnectivity needed between the two dozen or so disjointed applications but a component part of the overall process automation initiative. It is advisable not to solely rely on RPA for processes that require human judgement. One should look for smart automation solutions that leverage process orchestration as well.
It’s best to carefully evaluate smart platforms that can effectively address the challenges of 1. Data flow 2. Process automation 3. Seamless integration with a variety of disconnected systems, 4. Centralized client communications and all from a unified interface.
Smart digital platforms and technologies such as RPA provide the much-needed competitive edge to overall business productivity without having to replace your existing solution set. You can drive better operations efficiency by using integrated cloud-based solutions which provide the ability to work with client and business data anytime, anywhere. Automation often has manifold benefits in terms of financial impact. It helps bring down infrastructure costs while providing the ability to connect and collaborate in real-time, providing tangible value.
It is imperative for firms to adopt technology that works seamlessly while delivering consistent experiences across channels. Firmwide automation including RPA and its futuristic models packed with the power of AI and other capabilities are here to help CPAs keep pace with the evolving trends in the accounting industry.
Company: Century Software North America Inc.
LinkedIn: Century Software LinkedIn Page