What Is Robotic Process Automation?
Robotic process automation (RPA) is software technology that emulates human behavior in the digital sphere. It can replicate repetitive and tedious manual tasks performed by humans in the interface with computer software systems. RPA improves efficiency in the business world by performing these tasks more quickly and with fewer errors. Software does not tire like humans do, so RPA can perform tasks without interruptions and delays. By replicating manual tasks, RPA reduces demands on personnel and frees them up to do higher level work that software cannot replicate.
RPA is one of the many features in the broader application of accounting automation, which is the general practice of employing digital technology to improve and streamline the accounting process. Other aspects of accounting automation include artificial intelligence, machine learning, cloud computing, and real-time integration. While these processes are related, they are distinct from one another in significant ways.
These digital applications are helpful to businesses because they can perform the essential functions involved in the process of maintaining financial records. They minimize, and in some cases eliminate, the need for manual data entry and cumbersome spreadsheets. They execute fundamental tasks, such as capturing and entering data into the business ledger, reconciling discrepancies, updating records, and producing reports and financial statements.
Automation greatly reduces the time, labor, and costs involved in the accounting process. It is becoming more popular as businesses and organizations see the advantages of migrating their accounting systems from a manual, spread-sheet dependent or paper-based system to one that is completely digital and automated.
How Is Robotic Process Automation Used in Accounting?
Robotic process automation can be utilized for business accounting in many ways. For example, in accounts receivable, bots can issue and send invoices to customers automatically. This greatly reduces time spent by personnel performing the same task. In accounts payable, RPA can greatly reduce the time it takes for the business to pay outstanding bills by following predetermined workflows and sending unpaid invoices to the correct person or department where payment can be processed. Bots can also match purchases orders with invoices to make sure they are processed correctly.
In intercompany account reconciliation, bots can acquire and check data from a variety of different sources for approval and identification of discrepancies or errors.
Payroll processing can also benefit from RPA with bots that can perform data entry, timesheet validation, and calculate deductions.
In the function of cost allocation, bots can easily capture data from different sources, including spreadsheets, documents, and emails, and merge it into a master file for the business’s Enterprise Resource Planning (ERP).
Why Is Robotic Process Automation Important in Accounting?
Robotic process automation is important because all businesses must remain competitive. Businesses that migrate to RPA and other forms of accounting automation gain an advantage over their competition by streamlining processes, improving processing time, increasing accuracy, and freeing up staff to perform other functions.
How Does Robotic Process Automation Make Accounting More Efficient?
In the accounting world, RPA enables the digital transformation of essential tasks. Many accounting functions, such as data entry and form completion, are repetitive and tedious. In the digital age, businesses often use multiple software platforms, varying forms of communications, and multiple data sets with volumes of information. All of these are ultimately dependent on human interface to perform properly, consuming tremendous amounts of time and effort and resulting in errors and inconsistencies.
RPA solutions can eliminate the need for human involvement in many of these functions. This makes the accounting process more efficient overall by reducing the demand on staff resources, speeding up processes, and reducing the incidence of errors.
How Does Robotic Process Automation Work?
Robotic process automation (RPA) is a form of automation that performs repetitive assignments, including sorting, data insertion, form completion, and interpretation of text and data. Unlike Artificial Intelligence (AI) or machine learning, RPA does not learn or develop its own logic based on algorithms. Instead, it relies on structured data and rules. It can greatly reduce processing time and free up staff for other work, by performing these time-consuming, repetitive tasks.
RPA software creates digital “robots” or “bots” to perform repetitive tasks. A user of the software programs writes scripts, or rules, that define what tasks the bot will perform. Through these scripts, the bot can capture data, open applications, initiate actions or responses, and communicate with other systems.
How Does Robotic Process Automation Integrate with Other Forms of Accounting Automation?
Robotic process automation works with other forms of accounting automation to give the business many advantages of digital technology. RPA enables a business to digitize its data entry functions from various sources, including receipts, invoices, bills payable, and expense reports. It also automates the creations of various documents such as the general ledger and financial statements.
RPA helps the business migrate to a cloud computing platform, which allows for a seamless integration of different applications and data sources, and an integration of work performed by disparate teams.
Finally, RPA helps the business achieve real-time integration. The instantaneous sharing of information in the form of data between various software applications cannot be achieved when humans are entering information into different programs manually.