Robotic automation is the latest technology innovation reaching all types of industries and regardless of size. Its simplicity approach to deliver measurable results as per the requirements and objectives of a company consolidated its position as an indispensable ‘A friend in need and indeed’.

Robotic automation cheers employees as they are glad to shift their role to more meaningful tasks as bots handle mundane recurring tasks. Meanwhile, management is not left alone in lavishing praise for saving unnecessary operational costs. However, all accounting firms deploying automation do not get the same benefit. There are few unsuccessful ventures and strategic failures where the ROI is not realized.

Therefore in between realistic returns and expectations of management, a much needed RPA performance metric is imperative. These key performance indicators (KPI) set a benchmark for providing an obvious and quantifiable depiction of both automation’s operational and financial performance.

Through utilizing these metrics the RPA team is in a better position to understand

• Fitness of their deployed automation structure.
• Identification of the loopholes in the process and remedial measures to close the gaps.
• Gather information where additional areas in the process can be automated.
• The possibility of increasing the ROI.

A special focus is needed by the automation team to figure out the right metrics to concentrate. There are few metrics universally applied, but there are few that are nuanced. We need to know what are the metrics that are commonly used by accounting firms and some that can be added to the list.

Also read: Accounting Automation : Balancing act between Realism Vs Expectation

Commonly used metrics:

1. Precision of the bot:
   The main utility value derived through robotic automation is its ‘accuracy’. It is factored in order to have a clear distinction between human and bot. Just as humans are performing their job, bots are programmed to perform the task indefinitely until stopped otherwise. Therefore, it produces accurate results, compared to mistake prone humans.
   
   When the precision rate increases then it is an indicator that your RPA is doing a commendable job by delivering a quality result.
2. Swiftness of the bot:
   This is an indicator of the average time taken by the robotic automation bots to execute an entire process. This is the most commonly used metric because it draws parallel between the time taken and cost saved through robotic automation implementation. Therefore, to achieve this it naturally has to do the work quicker and faster compared to the average time taken by accountants at a firm.
3. Deployment cost of the bot:
   There is always a direct association between overall implementation cost and ROI. It is fair to say that, because, when new technologies are introduced in any accounting firm there is a sizable amount of budgeted money spent on its deployment.
   
   Starting from consultancy, licencing, set-up cost, deployment, maintenance etc. But, only when there are obvious results shown through operational activities like accuracy, velocity or financial activities like increase in productivity, customer satisfaction etc. Then the firm is in a better position to gauge its ROI results.
4. Operational usage of the bot:
   The operational capability of robots is of greater importance and another metric to evaluate how they fare compared to accountants at a firm. While accountants and bookkeepers work under a defined pattern of work schedule and perform their tasks within those specific hours. Bots work undisturbed and relentlessly clocking a 24x7 availability.
   
   RPA bots give you a clear visibility of its ever present 24/7 attendance.
5. End results of process:
   This metric is a normal comparison between results obtained prior and after automation is implemented. It outcomes gives us a overall view if the bot was able to
   • Perform and provide results as per the regulated path of operation.
   • What percentage of variance was achieved?
   • Did it help in achieving your firms’ objectives?

Additional metrics for future:

1. Frequency of bots malfunctioning:
   After the accounting automation implementation, the frequency of bots breakdown either for maintenance or repair over a time period impacts the ROI. The work not done through automation is now done manually and it calls for factoring the person-hours taken by employees until the bots start functioning uninterrupted.
2. Time lost in maintenance:
   This metric is used to calculate the period the bot is unavailable and requires an employee to fix. It indicates how much business value is lost from the bot. It takes into calculation a few factors like
   • The time taken to identify that bot is non-functional.
   • Investigate the causes, repair and re-test.
   • Time utilized for finding out remedial measures in order to prevent this mishap.
   • Redeploying the bot to handle the automation as before.
3. Full time equivalent (FTE) of the bot:
   The commonality and viability of this metric is its representation of hours utilised by a full time employee for a given period (say one year or month). It is compared to the cost incurred for automating the process and manually performing the process. The measurement is the direct cost savings inclusive of hiring temporary employees as per the demand of the job.

Also Read: How do Accounting firms and bookkeeping practices ensure their data security during deployment of robots?

If you are looking for help with KPI metrics and ROI for your accounting automation implementation at your accounting practice, please call us. We not only can consult but also provide you with end to end custom made robotic automation solutions.