Finance and Accounting
Applications of intelligent automation in record-to-report processes
From focusing purely on order-to-cash and procure-to-pay to save costs, the end-to-end process transformation has shifted its focus to record-to-report (R2R). By using intelligent automation, process improvement methodologies, and predictive analytics, you can move beyond traditional control and reporting to strategic financial insights for greater efficiency.
The financial record-to-report process helps internal and external stakeholders in performance evaluation, strategic planning, making investment decisions, building trust, standardising reporting, risk mitigation, tax liability assessment, and strategic tax planning.
This article covers the definition of the record-to-report (R2R) accounting process and its practical applications and use cases.
What is the record-to-report process in finance?
Record-to-report is a comprehensive framework to transform raw financial data into actionable insights. The key components of R2R include:
- Data collection: Collect and record all the financial transactions accurately within the system.
- Data processing: Classify, sort, and record the transactions under the right account categories.
- Consolidation: Consolidate the data from various systems, sources, and subsidiaries to present a unified view.
- Reconciliation: Ensure the accuracy and consistency of the financial data and the reports.
- Reporting: Create statements and reports that reflect the company’s financial health and help in decision-making.
- Analysis: Interpret the data using technology to help the leaders in strategic decision-making.
- Closing: Finalise the reports and close the monthly, quarterly, or annual books and accounts.
For a business, R2R is not just regulatory compliance but the backbone of strategic financial planning and analysis to assess the organisation’s financial health. This helps leaders make informed decisions to drive growth, sustainability, and regulatory compliance.
Practical applications of intelligent automation in R2R
R2R is a critical area where intelligent automation (IA) can integrate with robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML) to drive efficiency. The key benefits of technology-driven R2R include:
Empowers the team to work smarter
R2R can easily reduce the time taken for and automate rules-based repetitive tasks such as data entry, accounts reconciliation, and report generation. It relieves the accounts team from mundane jobs so that they can upskill and participate in strategic decisions through data analysis and insights. R2R automation brings efficiency within the finance department and the ability to make data-driven decisions.
Provides leaders with powerful insights
In continuation with the point above, strategic decision-makers can leverage rich data to feed into advanced analytics and business intelligence. This gives a deeper visibility into performance metrics and trends of the business. Leaders can use these insights to identify new opportunities, reduce costs, and become a strategic lever driving overall business growth.
Strengthens compliance and governance
By consistently applying rules and logic to F&A, the automated R2R process ensures compliance and governance. Bots bring accuracy without fatigue and provide a transparent audit trail with exceptions and anomalies for human review. Automated R2R also helps internal and external auditors in ensuring governance and compliance.
Use cases of intelligent automation in R2R
Intelligent automation within R2R uses intelligent workflows and enables faster and more accurate reporting. Its common use cases include:
Reconciliation
Financial reconciliation ensures accuracy, which is difficult and time-consuming if done manually. The complex tasks of reconciliation and validating the general ledger with the source can be easily done with automation. RPA technology can access and compare general ledger and sub-ledger data, identify any problems, and pass adjusting entries. It then automatically uploads the reconciled data into the financial system.
Financial planning and analysis
RPA can gather and structure information across systems for accurate budgeting, forecasting, and reporting. It helps in aggregating and formatting data, executing standard calculations, creating reports (preliminary and management), and performing variance analysis. This gives employees more time to analyse outcomes and formulate business strategies.
Accounting
Robotic process automation in F&A is used for complex reconciliations in trial balances and posts to general ledger accounts. It normalises the data and opens and compares each account in a ledger with the general ledger and posts the trial balance in the correct ledger account.
Compliance and regulatory reporting
To ensure accuracy and compliance, businesses rely on manual controls, validation, and reporting methods. RPA can easily establish and handle the necessary audit trails, ensure proper documentation for authorities, and bring peace of mind to the business leaders.
How can Infosys BPM help with record to report automation?
The record-to-report solutions at Infosys BPM ensure on-time closure of books of accounts with accurate financial data. It ensures compliance with financial statements and the necessary reporting requirements.
Read more about record-to-report automation at Infosys BPM.
