With Robotic Process Automation (RPA) technology improving, there’s a lot of excitement around what RPA can bring to Finance departments. Report after report shows the value RPA can deliver, with many focusing on the ROI of automating processes, RPA’s impact on accelerating the close, and how organizations can better allocate limited resources.
While there’s no question that RPA drastically reduces the time and effort it takes to close the books, there’s an even bigger ROI opportunity but it’s often overlooked. Beyond increasing processing speed, RPA’s ability to reduce errors has a substantial impact on the last mile of finance, particularly with validation and reporting.
According to Deloitte, the last mile of finance tends to be an often-overlooked area for Finance departments, which means there are still many opportunities for improvement.
For example, in Balance Sheet Integrity – Utopian Close Deloitte says, “Companies have invested heavily in the front-end of a financial process, promoting efficient and effective transaction processing through unified policies, procedures, and systems. In the past, this same focus has not been given to the last mile of finance, resulting in manual and error-prone processes.”
It’s essential to have unified policies, procedures, and systems in place before utilizing the power of RPA in your Finance department. Otherwise, RPA will accelerate the production of waste alongside the automation of valuable activities.
But the hidden value of RPA is that it extends across the entire R2R process and automates those manual, error-prone procedures in the last mile of finance, which drastically reduces risk while delivering dependable data.
During the financial close, balances need to be validated, records must be consolidated, journal entries need to be adjusted, financial data is gathered to be disclosed, and financial statements must be prepared. There’s a lot of risk for error in these activities, and that’s where the hidden value of RPA comes in.
As Gartner’s CFO Advisory: Last Mile of Finance report states, “The last mile of finance is ripe for cost reduction and efficiencies. While costs and resource consumption can be reduced by automating these processes, the bigger financial impact is in preventing the fallout from penalties, fines, lawsuits and valuation that result from inaccurate filing of financial statements.”
With RPA, vast volumes of data can be processed in a fraction of the time while ensuring accuracy and granting visibility into even the smallest of details, regardless of region or division. While there is unquestionably great value in the reduction of the close timeline which grants time for analytics, RPA also delivers unparalleled accuracy, visibility, and reduction of risk.
While RPA delivers ROI across the entire R2R process, some ROIs are easier to measure than others. It’s easy to compare ROIs on the reduction of FTE hours on mundane activities and increases in close efficiency, but perhaps the bigger impact of RPA is in its reduction of negative financial impacts, such as in its ability to stop mistakes before they are made or automatically attach documentation to proactively avoid audit fees.