Finance and Accounting
Streamline accounts payable with robotic process automation (RPA)
Businesses adopt automation to achieve operational excellence and to reduce costs, an imperative today to gain an edge in a highly competitive business environment. While most departments within an organisation are quick to assess, identify and automate their workflows, finance often lags. Apart from complex workflows and working with unstructured data, the need to maintain the confidentiality of financial information and the lack of user-friendly applications has affected the adoption of automation. Paper-based processes still rule the roost in many organisations, leading to delays in invoice processing and payments.
Another downside is the impact on costs, which many do not realise unless some specific numbers stare at their face. For example, credible industry studies have suggested that effective accounts payable (AP) processing can reduce costs by a whopping 58 per cent. Another study found that 80 per cent of supplier discounts go unclaimed because of payment delays! And it does not end there. Multiple issues, such as lack of visibility into cash flow, increased fraud risks, poor spend management, etc., add to the woes of a manual AP system.
Identifying these limitations, while being backed by credible data, helps set the stage for Robotic Process Automation (RPA) in AP.
Robotic Process Automation (RPA) in AP
RPA is a game-changer that streamlines and automates routine tasks, revolutionising the AP functions. A McKinsey report titled ‘The transformative power of automation in banking’, suggests AP is one of the pilot processes to implement RPA in banking because of its huge impact and the cascading trust effect. Let us take a brief look at RPA.
Decoding RPA
RPA, at its core, allows the creation and deployment of software robots to perform repetitive tasks based on identified rules. These bots watch and learn to mimic human interactions based on codes. RPAs can copy and paste content, log into systems, move files and folders, perform routine communication, extract data from files, etc. RPA, however, cannot learn and gauge patterns like machine learning (ML) algorithms can. They can only follow prescribed procedures and protocols to achieve high levels of precision.
What can RPA do in AP?
The Deloitte report, ‘Refocus your robotic process automation lens’, saysRPA deployment in AP is possible for certain activities with varying degrees of automation. They include:
- Processing invoices (high)
- Maintaining supplier data (high)
- Processing periodic reports (high)
- Payment processing (medium)
In invoice processing, bots can automate matching invoices to purchase orders (PO), extract relevant information from paper invoices, automate data entry and route the invoices to the right individual for approval. Further, it can automate the payment process with complete visibility into the payment due dates, early pay discount deadlines, etc. Additionally, supplier data management and payment processing become centralised, more efficient and accurate. The sophistication of AP applications with user-friendly drag-and-drop features, intermingling with optical character recognition (OCR) tools, cloud-based integration, intelligent automation with Gen AI technologies, etc., can transform AP and help organisations achieve or surpass their savings goals.
Advantages of RPA in AP
Increased accuracy
By removing manual matching and data entry, RPA enhances the accuracy of invoice processing by leaps and bounds. RPA is programmed such that exceptions are minimal. Matching and processing happen like clockwork, provided all the data match prescribed protocols. It saves time, reduces costs significantly and ensures fast payment processing without unnecessary delays. Businesses can reduce labour costs and utilise their personnel for other strategic activities. Also, RPA can provide total visibility and transparency to the suppliers to track their payments, resulting in improved supplier relationships. One study pegged supplier relationship improvement at 38 per cent, which leads to more tangible benefits.
Enhanced decision-making
The RPA bots can feed humongous amounts of AP data into business analytics tools to provide visibility into spending patterns, inefficiencies, etc., to help improve the process. Also, with the help of predictive analytics, data-driven decisions can help tweak strategies on many aspects, especially supply chain-related. Timely course corrections can also result in reduced costs.
Agility in times of uncertainty
Since change is the only constant, businesses must scale fast to seize the opportunity. And RPA in AP gives businesses a competitive edge by doing so without any hitches. It allows easy scaling by reusing or reallocating RPA bots to manage workloads across the organisation.
Improved compliance and risk management
Accounts reconciliation, usually a cumbersome process when done manually, becomes easier, faster, and more accurate with RPA bots. Also, PO generation becomes more streamlined with the help of automated data entry and alerts reminding people not to hold up the process. More importantly, vendor payments are subject to regulations and audits. RPA AP tools help with these compliances to ensure financial integrity in all payments while accelerating the process. Hence, payment-related risks are better managed, as RPA eliminates or highlights inaccuracies to aid better decision-making. Along with smart financial tools, RPA in AP can help streamline and ease financial closing and reports.
In conclusion, RPA is reshaping the AP landscape while offering myriad benefits. By understanding its potential, businesses can unlock new levels of efficiency in their financial operations.
How can Infosys BPM help?
Infosys BPM’s AI Digital Accounts Payable services transform the invoice-to-pay process by leveraging next-generation technologies and AI/ML models that ensure time-to-value coupled with enhanced stakeholder experience. The key features of our future-proof accounts payable on cloud (APOC) SaaS platform include improved efficiency, stakeholder experience, insights, etc., to name a few.
