Robotic Process Automation (RPA) is an innovative technology that transforms how businesses manage the Accounts Payable department. It allows businesses to design software that interacts with different digital systems and imitates the actions of their employees.
RPA software integrates different processes into an extensive programmed system that seamlessly performs various tasks simultaneously. You can program this system in a range of different processes, such as transaction processing, data entry, and email response. That said, RPA is ideal for imitating repetitive and predictable human actions.
RPA plays a crucial role in maximizing efficiency in many industries, including human resources, retail, and healthcare. As RPA technology becomes increasingly important amongst recent social restrictions, Forrester predicts that the RPA market will be worth $2.9 billion by 2021.
Because of its incredible robustness, this technology also helps finance departments, especially in optimizing accounts payables and receivables. Today, we will examine the role of Robotic Process Automation in Accounts Payable processing.
RPA is most suited for industries that follow a strict set of compliance rules. RPA relates to compliance for your business and continually monitors the regulations that affect your company for changes. It can provide a solid system that protects against mistakes leading to compliance issues.
Errors in the accounting department cause wrong or late payments and increase the cost of transactions significantly. However, the usage of robotic process automation in finance is uniquely transformative.
Accounting processes such as accounts payable and receivable require a number of repetitive and tedious tasks. A robotic AP department can easily automate much of the work. For instance, if you use an employee to upload your business invoices, he or she will need to assess and process every single invoice manually.
Depending on the size of your order, processing the invoices manually can take anywhere from 3 to 10 minutes for each invoice. RPA can perform manual and labor-intensive tasks much faster, allowing you to use your employees for other business-critical tasks.
Robotic Process Automation can yield several benefits for your accounting department. Here are five top ways RPA impacts Accounts Payable.
Robotic process automation can greatly improve invoice data capture. The monotonous and intensive nature of manual data capture inevitably leads to occasional errors in the input. These errors are extremely costly. That said, RPA, is programmed to extract specific information and functions error-free.
Apart from extracting data without errors, the RPA system performs well during the order matching, as well. It looks out for exceptions and keeps them to a minimum. As these systems are programmable, you can configure them to match invoices at all levels. Doing so makes invoice error handling extremely convenient and allowing you to pass correct invoices over to the approval stage without hold-ups.
Sometimes, employees creating purchase orders forget to confirm the receipts of goods or services, leading to unnecessary delays. However, with the help of RPA, you can automatically send alerts to purchase order creators whenever they miss the purchase order, ensuring that delays are kept to a minimum.
Many companies are filled with countless checks, balances, and other procedures that overcomplicate the invoice workflow. In a manual setting, these systems are riddled with inefficiencies that slow down invoice approval and delay payment to suppliers.
In contrast, an RPA system leverages a pre-configured invoice approval workflow, eliminating unnecessary delays. As you assign relevant invoice approvers to the system, RPA routes every invoice to an approver automatically. This happens at every stage of the workflow and each manager party can approve or decline, just by sitting at their desk.
An RPA system also allows you to set deadlines for invoice approvals. These deadlines help approval managers respond to approval requests promptly. If a manager does not request an invoice approval on time, the RPA system requests the approval again, so it doesn’t get missed. In case, a manager fails to respond to the second request it will re-route the invoice to another pre-configured manager.
Thanks to robotic process automation, the AP staff doesn’t have to visit invoice approvers from time to time, waste their time entering manual enter data, or spend hours reexamining exceptions at the data capture and matching stages. This boosts the morale of your workforce and allows them to dedicate time to customers and other business-critical tasks.
As businesses grow, they need to focus on reducing operational costs to maximize profits. According to a study by Deloitte, robotic process automation is crucial for reducing costs related to business operations.
Previously, most invoice data entry and matching tasks were carried by external services in urgent situations, especially as the financial year closed. Organizations had to spend significant money to meet tight deadlines and put the book in order. However, a single RPA system can take on those roles effectively, helping your business cut unnecessary costs.
Moreover, many suppliers offer special discounts to businesses that pay invoices early. As RPA allows you to process invoices faster, you can also benefit greatly from early payment discounts. Because you pay invoices before deadlines end, you can also save your organization from late payment, reducing your operational costs in both ways.
Payment delays create mistrust in vendors and ruin the company’s reputation amongst other suppliers. With RPA in place, your company can greatly improve how quickly managers approve invoices.
Likewise, when your company pays all invoices on time, it is highly unlikely that the supplier will send the same invoice twice. As a result, you no longer have to worry about paying duplicate invoices. In short, RPA ensures that you maintain good relations with your suppliers and keep invoice status visible at all times.
Robotic Process Automation is a technology of the future. It ensures that your AP department performs at maximum efficiency, enjoys lesser cost, and meets all compliance regulations. Seeing the several benefits, RPA offers, it’s easy to see how it will dominate the invoice processing landscape in the coming years.