The Role of Robotic Process Automation (RPA) in Accounts Payable Process Management
Robotic Process Automation: Potential Wins and Roadblocks
Some people doubt the appropriateness of Robotic Process Automation for AP tasks, especially as financial transactions are such a vital part of a company’s operational success. While RPA is gradually being adopted by companies worldwide to automate AP activities, an Oracle whitepaper titled “Process Automation for Accounts Payable” highlights some potential roadblocks:
Lack of Invoice Standardisation: When companies receive invoices from their suppliers and contractors, they can appear in a myriad of formats: in hardcopy, as a Word document, PDF attachment, and even a scanned copy. This non-standard quality of invoices creates problems for companies as they try to automate their processing using software.
Unstructured Data: The data from the various invoice formats must be transferred to the company’s database by the finance department. AP workers must also resolve any differences between the invoice, purchase order and bill of lading, as well as being responsible for payment approval. As the data in the invoices lack a consistent structure, manually transferring the data can cause inaccuracies while also being a slow process which proves problematic for some automation software.
These downsides notwithstanding, recent technological improvements have significantly developed the abilities of Robotic Process Automation, particularly in regards to optical character recognition (OCR) and the automation of approval and exception activities. Improvements in OCR enables companies to hand over the interpretation and scanning of paper invoices to software robots, saving a considerable amount of time in the process. Similarly, their ability to manage discrepancies in invoices and paper documents with minimal employee involvement has also grown. Therefore, Robotic Process Automation can provide competitive advantages to companies adopting this new technology. Some positive points associated with the use of RPA include:
Identification and resolution of matching errors: Resolving errors in purchase amounts, vendor contact information between invoices and purchase orders and other detailed inaccuracies present major headaches for AP staff. Software robots can alleviate much of this manual work and ensure a greater level of accuracy, while also freeing up employees to spend time on more important financial activities, including budgeting and strategy.
Easy to scale: Best practice Robotic Process Automation workflows can easily be reused across different departments and locales, ensuring simple scalability. Robots from the active pool can quickly be re-allocated to busy queues to suit a company’s present circumstances, whether it be a state of ongoing growth or ad hoc fluctuations in the AP workload.
Faster account reconciliation: When closing the books is dependent on multiple employee inputs, it becomes a time-consuming, complicated procedure. However, if RPA software is used to automate data transfer, troubleshoot inaccuracies and manage minor decision-making, the human error factor is diminished, making account closure a quicker and more accurate process.
What does RPA mean for BPOs?
Robotic Process Automation may at first seem like the beginning of the end for BPOs, as they enable businesses to perform their own AP activities more efficiently. So, what is a BPO to do? To maintain their standing and relevancy in today’s competitive marketplace, BPOs would be wise to consider providing Robotic Process Automation AP services to companies themselves, and many have adopted this approach already.
For both companies and BPOs respectively, Robotic Process Automation poses the possibility of increased efficiency in conducting financial (especially AP) activities. Whether a company is still navigating inconsistent invoice formats or has implemented fully electronic invoices, RPA has definite benefits to business when it comes to invoice processing and reducing operational expenditure. While it is true that some roadblocks are still present on the highway to full AP automation, improvements to Robotic Process Automation software mean that companies large and small can take advantage of automation for healthy business development.