What is robotic accounting and finance?

Simply put, robotic accounting and finance is the use of automation software applications to reduce the amount of human labor required to process accounting and finance department transactions. The introduction of specific software applications such as UiPath and Blue Prism has significantly simplified the work and skill required to automate, where before automation had to happen at the computer code level.

Remember that old slogan, “There’s an app for that!” Well guess what? Finance and accounting staff can now say that about RPA.

Though similar to an Excel macro, robotic process automation software has a major difference. Instead of being limited to the macro running only in Excel, RPA software runs across any accounting application that you point it to. Think of RPA as a macro that can tell three applications what to do instead of just Excel. Robotic process automation in accounting is also often referred to as AI (artificial intelligence) and machine intelligence. They’re interchangeable for a reason, as they all refer to the RPA process.

Most RPA providers for finance operations try to make the technology sound complicated to build hype and the sales interest of CFOs. But don’t be fooled. RPA is much simpler than you might be led to believe. Let’s break through the technology-consulting jargon to talk about finance and accounting robots (robotic process automation) in a simple way.

3 Benefits of Robotics in Finance and Accounting

Robotic process automation by itself is not a silver bullet or stand-alone solution for modern business process improvement in finance operations. But, if you’re careful to pair it with the right depth accounting process analysis and work standardization before implementing it, RPA can yield benefits far past any new infrastructure implementation.

How is that possible? Let’s review the benefits of RPA in finance:

  • Finance and accounting RPA bridges the gap between disparate applications – it really is “the last mile” of process automation. Where most large finance and accounting system implementations like SAP and Oracle fell short in terms of straight through processing, robots integrate at the micro-task level where the big systems could not.
  • No need for any large scale technology infrastructure change. RPA acts as both a bridge and layer between all the applications that you are currently running.
  • RPA in finance and accounting isn’t only limited to journal entries. It can be applied to other processes, such as; accounts payable, accounts receivable, financial close, controller work, financial planning and analysis, expense management, and even tax.

The benefits of robotic finance and accounting never manifest as an entire FTE, but rather a long tail of work tasks over many employees. After all, the end goal of any robotics project is the cost reduction of human labor.

A Simple Accounting and Finance RPA Use Case Example in Accounts Payable

Let’s set the scene. You’re an accounts payable clerk that has Quickbooks, Excel, a PDF invoice from a customer, and Outlook open on your computer.

What if you had to pull customer data (name, address, invoice number, invoice amount) from the PDF invoice, paste it into Excel for internal financial reporting purposes, then had to paste the same data into Quickbooks so you can cut a check for a vendor, and then had to copy and paste info from Quickbooks into Outlook to send an email to the person that you cut the check for confirming the payment was processed? Sweating just from reading about it?

Now imagine if you sat down and analyzed the process just discussed above, documented the accounting work flow, and figured out exactly what fields had to get copied and pasted from each application into the other. Add to that the ability to make the copying and pasting happen automatically? Well – that is exactly what a very basic use case for robotic accounting and finance operations sounds like. You can remove literally all the copying and pasting work if you dedicate some time to standardizing the process and then putting an RPA action on top of it.

If you’re looking for a more visual example, this YouTube video should work for you. It shows UiPath being used in a finance and accounting process similar to what we just discussed.

Steps to Implementing Robotic Accounting

The above example sounds like pretty normal accounts payable processing work, right? And the example sounds like a lot of work, doesn’t it? Well, it is. And what if all that copying and pasting happens 100 times per day on one accounts payable employee’s desk? And what if all that work is happening at 100 or 1,000 similar desks in your company? That is a lot of copying and pasting going on to pay the bills…and a giant opportunity to streamline finance and accounting work with an RPA project.

Of course, you can’t just throw a robot at one person’s spreadsheets and call it successfully implemented robotic accounting. You have to scale up process and data standardization across multiple FTEs first. This maximizes the benefits of a project and must happen before a robotic accounting is even attempted.

Let’s walk through how a process standardization and RPA analysis project in finance and accounting should play out.

Scope the Accounting and Finance RPA Project to Develop Use Cases

Not all work streams are created equal for the purposes of RPA. The first step to any accounting and finance RPA project is identifying a manageable scope of processes that would benefit from robotics. Accounts payable, with its repetitive work, tends to lend itself better for RPA than a process like budgeting, which requires a lot of human estimation.

In our experience, we’ve found that starting with a pilot scope to minimize risk and generate buy-in is best. Starting with two or three work streams out of the entire finance department works well compared to doing the entire thing at once. When you succeed at smaller scale, you can then invest in rolling it out to a larger group.

Determine Baseline Finance and Accounting Operations Cost to Calculate Total Benefits Realized from RPA

You never know how much you’ve improved if you don’t measure both your initial attempt and your subsequent attempts. Likewise, without the initial operating cost for the accounting function in scope for RPA, how can you determine the financial benefits and business case for implementing robotic accounting? That’s why step two of an RPA project is always setting the baseline cost of running the accounting operations. This way, it’s easier to prove the results of the process standardization and RPA roll out. Without this, you will never be able to prove to business leaders that there is any purpose of implementing robotic accounting.

Analyze Current State Finance and Accounting Processes to Document RPA Use Cases

Grab a laptop, a note pad, or your note-taking object of choice and get ready to sit at an accounting or finance worker’s desk all day long. You’re going to need to take note of every single mouse click that they do within the applications you are wanting to use finance RPA on top of. Or, you can go the OpsDog route and do these “day in the life of” observations using screen sharing software like GoToMeeting or Webex. We prefer  screen sharing software since it doesn’t require on-site consultants, lowering the cost of an RPA project.

Regardless of how you do it, you should analyze enough workers in the finance department to get a good sample size of RPA improvement opportunities across the entire in-scope group.

Identifying high volume, repeatable processes is a central, guiding principle in robotic process automation in finance and accounting

Process mapping is the starting point to develop use cases for robotics in finance and accounting.

When you’ve figured out exactly what the accounting work flow is and what the screens that need robotic process automation look like, use process mapping software like Microsoft Visio to visually represent the processes in scope. Remember, you need to document all the way down to the screen click and copy/paste level detail or you’re just wasting time. No one wants to be stuck in a reanalyzing loop. Make sure that you document using BPMN 2.0 stencil, as that is the standard for IT folks. This format is easiest to hand off to the automation implementation team when the analysis is complete.

By drilling down further into sub-processes, it is easier to create RPA use cases in finance and accounting

Here the finance RPA use case is detailed further, ready to be used with a robotic accounting solution  provider, such as UiPath.

Standardize Accounting Workflow and Procedures Before or During RPA Implementation

This is where things get difficult and real finance transformation work comes in to play. The hardest part of making a successful robotic accounting project is rolling it out at scale. Saving a few minutes of one worker’s day is great, but unless you uniformly roll out the work to an entire group, the financial benefits will fall short.

That’s why you have to standardize the work of the entire scope in play first. Accounts payable worker A being analyzed most likely doesn’t copy and paste screen or fields in the same order as Accounts Payable Worker B. And who knows how Worker C does things. You must implement work standardization for the entire group at the same time as you’re implementing the robots.

Hire an RPA Vendor to Implement – or Do it Yourself

RPA in finance and accounting is new and hot. But it is hot for a reason – it is not going away. If you can’t beat them, join them. Personally, we suggest that everyone get their hands on the Community Version of UiPath just to test it out in their finance operations and understand it. Like all new software, it has a bit of a learning curve but you can cut it short by watching some training videos on Youtube. Or even better, take an RPA certification class to get a leg up on your resume.

Despite a learning curve, getting hands on experience with RPA software is the easiest way to understand robotic accounting.

Though just one of several pieces of software available for finance RPA, UiPath offers a easy and free way to familiarize yourself with robotic process automation in accounting.

Now, remember, simply understanding a software application doesn’t mean you’ll be able to use it at scale across your finance operations without doing some serious scoped up analysis. If you don’t have change management experience, lean process improvement experience, or some type of other operations consulting work in finance and accouning, don’t bite off more than you can chew. Better call in the pros to help.

At the same time though, not all RPA vendors and consulting companies are created equally.

How to Select an RPA Vendor for Finance and Accounting

There are two walks of life on the finance RPA vendor consulting side. There are consulting firms that can help you analyze and build a business case for implementation, and then there are software vendors that will come out and install the stuff for you. A couple do both – but they aren’t as good as the ones who specialize in certain area. Below we will review the biggest RPA vendors in each camp.

Process Analysis Firms Create the Best RPA Use Cases in Accounting and Finance

Capco will do RPA mapping for you but they start from the ground up every time. They don’t use templates as a starting point. They reinvent the wheel with every project that they show up to and reinvent the learning curve almost every time. They are also mostly stuck in financial services and don’t operate in finance operations under CFOs.

Accenture, IBM, and Deloitte all pride themselves in being the best integration and IT implementers on the planet. We call them “full suite” firms.

But, if they are so good at IT integration and implementation, then why is there even a need for RPA to fix where their past integration projects fell short? We will talk about that in later posts.

The Lab Consulting has templates and a lot of experience in lean implementation for finance operations at a huge scale – think “biggest retailer in the world” scale. They focus on the nuts and bolts, the non-technology aspect of process analysis and improvement. White collar work standardization is a big part of their work so they are prime candidates for the process mapping and standardization needed for successful RPA implementation.

And finally, Opsdog! Us! We take an “a la carte” approach to our RPA mapping and finance operations work. We like to start small, do good work to prove that we know what we are doing. Then we scale up to more work once we get in a groove with our clients. We come to the table with tons of template-related IP, which you can find all over our website. Check out more on our mapping and RPA methodology here.