What is Robotic Accounting?
What Exactly is Robotic Accounting
Robotic accounting is a form of robotic process automation (RPA) in the accounting field. The emerging technology uses robotic submissions to reduce the need for human labor in manual accounting processes.
Robotic accounting is often perceived as a human replacement, but it is far from it. Rather, think of the technology as a group of “accounting bots” that reduce the effort needed to centralize data from different accounting systems.
RPA should be seen as more of a robotic arm to assist accounting departments and optimize operations. It should elevate tasks for employees and create more engaging work. Robotic accounting is artificial intelligence that provides a helping hand to a motivated finance department.
How Does Robotic Accounting Work?
Robotic process automation accounting consists of programmable software bots that automate time-consuming and mundane financial tasks. The technology functions much like a Microsoft Excel macro yet, the key difference is in power and reach. A simple command in Excel only reaches that one system. Robotic accounting software runs across any and every accounting platform a business uses.
It is often stated as a highly-effective form of machine intelligence that involves both audit/attest and tax work. Many RPA providers tend to make the technology sound complex to garner the sales interest of CFOs, but don’t let those pitches fool you. It is much simpler to integrate and use than one might think!
What Are The Key Benefits of Robotic Accounting?
The benefits of RPA run the gamut and differ greatly from traditional system integration and straight-through processing. Where most large ERP systems like SAP and Oracle fell short, robots can integrate at the micro-task level. This makes robotic accounting’s benefits both financial and operational.
Key advantages include cycle times, simplified workflows, increased accuracy, and reduced labor costs. Other benefits to note are:
Fewer Cost, More Revenue
Robotic process automation enables a business to speed up transactions with fewer errors. Automating repetitive tasks eliminates unnecessary expenses for your business.
RPA also allows you to shift focus from time-consuming and remedial labor to more productive and valuable jobs. This allows you to provide services to markets you may not have been able to reach or could not enter due to logistics.
Robotic accounting is one of the new technologies in finance that is non-invasive. It layers along with a current infrastructure and streamlines business processes. The ability to customize workflows means RPA is not narrowed to one part of accounting or finance. It can be applied to multiple use cases, like:
- Accounts payable or accounts receivable
- Controller work
- Financial close
- Expense management
- Financial planning and analysis
- And more…
24/7 With Zero Error
Robotic accounting works non-stop, around-the-clock. There are no working-hour boundaries because there are no humans involved. Programs can run 24/7/365. This increases productivity to levels manual laborers can’t reach and leaves zero room for human errors. It excels at an error-free transfer of data with reduced output inconsistency.
Employees are free to cover high-value work when an RPA project takes over manual tasks like data entry or invoice processing. Although you wouldn’t assume, robots can actually make humans happier and more satisfied with work.
Robotic process automation allows accountants to shift from mundane and predictive tasks to more meaningful work. Your staff now has the freedom to master their craft and offer high-level solutions to clients. It gives employees the time to learn and further their skills while driving business growth and customer engagement.
These types of moves help retain talent in a firm and give people the opportunity to shine within an organization.
RPA technology can be installed in less than a week. However, you need to do the research first to determine where in the accounting department it would work best.
How is Robotic Accounting Used?
Any type of business can take advantage of robotic accounting tools. Here is how they are being utilized today:
Public accounting firms love RPA, particularly when it comes to taxes, advisory, and assurance services. A significant portion of tax activities (like preparation of returns and book-tax differences) have been successfully automated by RPA software robots.
Reconciliation and Analytical Tasks
When auditing revenue, RPA can help auditors by logging into a customer’s file transfer protocol (FTP) site to retrieve relevant audit data, including the trial balance and financial reporting on current and past sales.
RPA will then calculate the total sale per listing and compare that to the trial balance. Assuming the amounts reconcile, the system will subsequently determine if the total revenue from the current and prior year is materially different. If the amount exceeds the materiality threshold, an immediate alert will be sent.
Dual-Purpose Audit Tests
RPA can can calculate whether the quantity and price are different across things like:
- Sales orders
- Shipping documents
The program will generate alerts for any sales transaction that contains differences in price or quantity. By automating these tasks, auditors can reallocate their time to more valuable activities, which can increase the quality of the audit.
Leveraging RPA software enables auditors to gain a greater understanding of a client’s daily operations and processes. This allows them to better assess the risk of material misstatement.
This is the next step in RPA. Since it’s a type of process improvement using technology, RPA is expected to replace repetitive and manual audit tasks. It is also intended to motivate the re-engineering of audit systems.
Due to the highly regulated nature of the industry, RPA for auditing remains in its early stages. It has historically incorporated many computer-dependent tools which have often been interlinked by manual steps and keystrokes.
RPA is a disruptive and dramatic change to current audit practices that enable auditors to operate at a higher level and perform more efficient work.
Modern finance functions on technology. It now forms the basis and core of even the simplest processes. However, this is a much-needed opportunity as big data is making it impossible for human beings to manage everything.
A business simply takes on too much information to go at it alone. Luckily, with technology like robotic accounting, people can focus more on human work that uses imagination, and less on being a bot.