4 minute read 16 Nov 2017
midsection dancing tango

Why robotics-led finance could signal the dawn of a new partnership

By

Detmar Ordemann

EY Global Financial Accounting Advisory Services Innovation Leader

Global innovation leader in finance. Passionate about addressing digital disruption. Trusted advisor to CFOs. Leading, developing and driving the technology of the future for EY clients.

4 minute read 16 Nov 2017

RPA technology can begin with simple rules-based tasks and scale to more sophisticated functions as the organization matures.

Robotic process automation (RPA) is the use of software that mimics human interaction with core systems, web and desktop applications to execute processes. RPA is an effective cost and time enabler, complementing any digital transformation journey to streamline business processes, achieve profitability and maintain a competitive advantage.

The best tasks for automation are the tasks that:

  • Are rules-based, to allow decision flows to alter dynamically
  • Are consistent, with the same step being performed repeatedly
  • Are template-driven, with data entered into specific fields in a repetitive manner

Non-invasive technology can be laid over existing systems and integrated with existing data, minimizing disruption to existing IT strategy and architecture. RPA technology can begin with simple rules-based tasks, and scale to more sophisticated algorithms and machine-learning functions as the organization matures.

What are the benefits of RPA?

  • Accuracy: RPA provides accurate results, with precision in decision or calculation.
  • Audit trail: It provides the availability of fully maintained logs, which is essential for compliance.
  • Cost savings: RPA can provide cost savings ranging from 20% to 60% of baseline FTE cost.
  • Reliability: RPA removes the need to account for sick days, making services available 365 days a year.
  • Return on investment (ROI): Typical RPA projects include multiple functional “pilots,” but the program is completed in 9 to 12 months with an ROI of less than one year.
  • Right shoring: Geographical independence reduces the need to offshore jobs while still delivering cost savings.     
  • Productivity: RPA allows the freeing up of human resources for higher value-added tasks.
  • Cross-industry: The standardized procedures make processes compatible across industries.       

Potential application of automation in the finance function

In the finance function, RPA can automate tasks that are of a repetitive nature and require tedious manual efforts, such as:

  • Bank reconciliation process

    • Automatic login to multiple bank accounts  
    • Automatic login to enterprise resource planning (ERP) system
    • Extraction of relevant general ledgers by the bot
    • Cross referencing of balances from bank statement to general ledgers
    • Preparation of bank reconciliation statement on predefined format
  • Sales ordering and invoicing

    • Automatic entry of sales inquiries
    • Updating of details for new customers by the bot
    • Initiation of delivery process and update of inventory records
    • Preparation of sales invoice from sales order
    • Posting of revenue entry into the system
  • Fixed asset management

    • Acquisition of quotations from prescribed vendors
    • Automatic preparation of report, comparing multiple quotations
    • Preparation of fixed asset budgets
    • Preparation of additions and disposal reports
    • Fixed asset register reconciliations
  • Financial and external reporting

    • Financial reporting
    • Regulatory reporting
    • Statutory reporting
    • Other reporting
  • Inventory management

    • Verification of inventory received and performance of three-way matching
    • Calculation of price and quantity variances
    • Generation of reports in multiple formats
    • Automatic shipping process
    • Calculation and posting of year-end adjustment entry
  • Receivables management

    • Automated monitoring of receivables
    • Sending of reminders to customers for long outstanding balances
    • Calculation of provision for doubtful debts, in accordance with the company’s policy
    • Posting of journal entries related to payments and provisions
  • Payables management

    • Cross-checking documents to verify the accuracy of payments
    • Compilation of payables listings
    • Monitoring of outstanding balances
    • Preparation and posting of year-end adjustment
  • Financial statement closing

    • Updating of comparative figures for the financial statements
    • Calculation and posting of exchange gain or loss valuations
    • Posting of regular and repetitive closing entries, e.g., accruals
    • Fair value adjustments and entries
    • Collection of information for specific disclosures
    • Financial statements and ratio analysis
  • Tax planning and accounting

    • Tax accounting and tax data management
    • Tax accounting and analysis
    • Tax accounting and preparation and review
    • Tax compliance

Robotics within finance

Assessing the benefits of introducing RPA into the finance function

Manual processing with little subjective judgement, e.g., general ledger inputs to consolidation reporting package

FTEs reallocation and reduction

Data input

Extracting data from several applications and reading emails, files and folders


60%–80%

Data output

Sending data obtained from the execution of the process with pre-defined format and distribution channels (e.g., email, file transfer and web-based transfer)


50%–70%

Reconciliation

Understanding and combining data retrieved from several applications  (e.g., cash reconciliation, and profit and loss reconciliation)


40%–60%

Data quality management

Measuring data quality and testing consistency (e.g., batch monitoring, and availability and integrity check)


Control quality improvement
60%–80%

Reporting and dashboard

Implementing dashboards and generating reports


30%–60%

Business rules

Applying business rules (such as accounting bookkeeping principles, amortization themes and cost reallocation) on the basis of formalized principles and guidelines


20%–40%

           

Outcomes of introducing automation into the finance function

  • Automated solution can work 24/7
  • One-third of the cost of offshore FTE
  • Double-digit reduction in error rates
  • Robots that work with existing IT landscape
  • Robots that can be trained by business users
  • Data entry costs cut by up to 70%

EY’s edge in RPA

  • Identified methodology
    We have a proven methodology for RPA strategy formulation and deployment.
  • Technology professionals on leading RPA tools 
    Strong experience and relationship with leading RPA vendors coupled with consulting help us provide RPA services with a customizable proposition.
  • Future and vision
    We are moving toward “smart robotics”. We are building experience across various industries, collaborating with leading and disruptive technology providers.
  • People capabilities
    Our teams include highly experienced professionals across the spectrum of RPA strategy with knowledge of deployment across tools.

Summary

RPA is an effective cost and time enabler, complementing any digital transformation journey to streamline business processes, achieve profitability and maintain a competitive advantage.

About this article

By

Detmar Ordemann

EY Global Financial Accounting Advisory Services Innovation Leader

Global innovation leader in finance. Passionate about addressing digital disruption. Trusted advisor to CFOs. Leading, developing and driving the technology of the future for EY clients.