If you are reading or listening to the buzzwords in the business world, it is common to read or hear words like RPA or robotic automation used interchangeably. Naturally, there is a curiosity surrounding the words. Let us see what they are and more importantly how they can be useful in the world of accounting.

The history of automation

Ford Motor Company in 1940s, conceived the term, ‘Automation’ in the line of mechanical automating working processes. Quality assurance was the reason behind “Industrial automation” introduced in its assembly lines. ‘Office automation’ started only in 1960s but became popular in the late 1970 and 80s thanks to IBM and Microsoft introducing desktop computers replacing the traditional typewriters and heaps of paperwork on our desks. Through automation many tasks got accomplished faster, and the business operating costsdropped significantly.

Robotic Process Automation (RPA)

In the long list of automation, the latest technology that has entered the digital world is robotic process automation or RPA. It uses Robots or simple bots to automate the laborious and repetitive tasks otherwise performed by humans. RPA utilizes software ‘bot’ to imitate human work practices at areas where huge amount of datais sorted, segregated, categorized, and posted. By adopting RPA, human resources in an organization can be properly utilized in doing value added tasks while the routine tasks can be left to the RPA bots.

The service sector industries like Finance & Accounting, Banking, Health care and Insurance sectors can hugely benefit from the robotic process automation. Whilst RPA would eventually have entered these sectors, we wonder if the Covid pandemic has increased the necessity and accelerated the process of adopting RPA.

Automation and the accounting industry

Accountants for centuries utilized some form of automation to hasten their process. Through times,

• 1880s – introduced adding machine
• 1928 - handle date through punch-card machine
• 1955 – General Electric introduced Universal Automatic Computer to process payroll.
• In 1983 - Intuit introduced Quicken, as an Accounting software
• In 1987 - Microsoft introduced Excel as a spreadsheet.

Why RPA in accounting industry

As multitudes of accounting functions are ‘Ruled based’, it makes an ideal nominee for deploying RPA. RPA perfectly supplements accountants by relieving them from the pain staking, time consuming, data driven tasks. The ideal places to start automation are…

• General accounting: Journal entries, classification,adjustments, andreconciliation
• Operational accounting: accounts payable, accounts receivable, payroll

How can the accounting firms benefit from automation?

The benefits can be substantiated both from financial and operational angles.

Benefits from operational angle:

• Speed up transactions with negligible errors for your clients
• Needless to stick to operating cycle times, can retrieve data any time
• Focus on value-oriented jobs as time and labour consuming jobs gets automated
• Logistics barriers is mitigated as you extend services to other markets with your productive time
• Non-intrusively streamlines into the client’s business process or software used and customized with their present infrastructure
• Provide additional consultancy services to the clients

Benefits from financial angle:

• Increased revenue opportunities by abolishing repetitive tasks
• Reduced payroll costs as no need to hire additional resources to manage workload as accounting bots can run non-stop 24/7
• Lower initial investment and quicker ROI

What are the hurdles in deploying bots in an accounting firm?

It is always perceived employees resist any form of change in the organization and they follow the marshal lines. But interestingly, the first resistance comes from the management itself. Let us try to understand their reasoning first.

• As RPA bots are non-judgmental, humans are needed for cognitive abilities in interpreting financial data and reports
• Adhere to the government policies to create employment opportunities in the organization
• Perceived the ROI is very less, and deployment process is lengthier and expensive
• Standardization of financial process is time consuming
• Yet to outgrow from the idea RPA bots replaces human, but rather interplay their work

Why accounting firms should get started with RPA

A conservative and process-driven industry like accounting, to adopt technology gives a new set of challenges. However, this nascent adaptation is necessary due to the following reason:

• Expansion and existence - to implement at a quicker pace
• Strategic advice - sought and relied by the Entrepreneurs
• Regulatory compliance - gets improved
• Competition - hold an edge in the market
• Guidance - for cost saving and reduction

As we conclude, unprecedented events of the past year gave an avalanche of digitalization of core sectors and its allied industries.

The 16th US President Abraham Lincoln rightly quoted.

`The most reliable way to predict the future is create it´.

Instead of being rebellious to the idea, the truth lies in embracing the idea and working on building a strong future. If you are an accounting firm (of any size) and looking to embrace accounting automation, we provide you with reliable solutions to automate your firm's accounting process. Book a demo today and see the bots in action for yourself.