Robotic Process Automation (“RPA”) in Accounts payable process

The manual accounts payable process remains one of the most problematic and tedious jobs imaginable. It is time-consuming, prone to errors, and in the end, it can occupy too much of your team’s bandwidth — bandwidth that could be used more productively elsewhere. 

This process has been re-imagined several times before but some problems rest in the very foundations of the accounts payable process. 

ERP systems, e-invoices, and OCR indeed changed things, however many organizations keep running their accounts payable processes manually and then outsource their accounting sector to third party companies.

RPA in the Accounts payable process

RPA in finance and accounting is there to connect the dots and create that missing link. Making your invoice completely digital, eliminating tedious, repetitive, and often unnecessary tasks. 

You will be able to send, receive, approve, and track your invoice in a much swifter and more elegant fashion without any interference from human error. 

This leads to a wide range of benefits. Today, we will examine some common challenges, benefits of implementing RPA, use cases, and, of course, how you can bring RPA automation to your company.

RPA automation challenges

Two main drives that stand between automation of accounts payable processes are cutting costs and saving time. But which factors make this more challenging? 

  • Invoices arrive in many different ways: like paper, pdf documents, or via fax.
  • Unstructured data issue: the manual transformation of different document formats to one standard format of invoices is extremely repetitive and ineffective.
  • Approval process and resolving the discrepancies: This is also very time-consuming because it pulls out more questions than answers which makes solving discrepancies much more difficult.
  • Paper format: Excessive use of paper is outdated and runs contrary to most companies’ dedication to eco-friendliness.
  • Manual work and data entry: with so many different technologies emerging, why rely solely on manual labor?
  • Lack of transparency and no clarity to invoices: an end to end process is not transparent enough.
  • The problem of lost and missing invoices: Searching through email and physical mail to find the right invoices can be time-consuming and inefficient. 

RPA in accounts payable process benefits

Robot process automation (RPA) benefits are numerous. RPA will limit the human factor from processes. Eliminating manual processes, automating the workflow, and removing repetitive tasks eliminate costly mistakes.

  • Streamlined invoice management matching the right data: RPA can extract the right data and match the invoice to the right supplier information.
  • Accounts payable automation leads to better compliance: Your employees are under pressure to get their numbers right and sometimes they lose track of the receipts for goods or services that are confirmed.
  • Cost savings: It’s plain and simple — reducing costly errors caused by the lack of attention to detail saves money.
  • Improved relations with vendors: Accurate and punctual payments increase trust. As does a swift and transparent process.
  • Scalability: Software robots can handle high volumes and can also be allocated elsewhere if needed.
  • Transferring files, entering data into different applications, generating an accurate spreadsheet, processing unstructured data to emails, and document flow: RPA can make all of these processes happen much faster.
  • Financial reporting: Tax entries are added automatically.

Accounts payable RPA use cases

To understand the power of RPA in the world of accounts payable it may help to look at some real-world examples. 

Making a perfect match between accounts payable and accounts receivable

Invoices tend to take many different routes to reach you. That includes invoices sent through email, via fax, or directly from a website. After an invoice is received, it needs to get to the invoice approval or financial department. Sometimes, this is a job for multiple teams which increases the time and red tape needed to complete the process. 

It often takes 4 to 16 days from invoice receipt to invoice approval. 

Keeping track of the invoice or invoice status could also be incredibly tricky. This entire process requires countless email threads and paperwork. It also requires accuracy, consistency, and focus — when human resources are added to the equation it can lead to costly mistakes. So RPA can help you establish a smooth, efficient workflow between different systems.

Better vendor management 

Many large, global companies work with thousands of different suppliers with different payment options and different credit rules. With RPA you will be sure that all your bills are paid and up-to-date.

AP automation solutions can also be helpful when two branches of the same company are engaged in transactions. RPA helps ensure those transactions are tracked accurately so that payments come from the correct budget lines without shorting or overpaying the vendor.

Fraud detection

With a transparent invoicing process, it will be much easier to detect fraudulent behavior by discovering irregularities in the data patterns. Standardized workflows through RPA make irregularities stand out more clearly so they can be caught and addressed quickly.

Real-time monitoring on daily profits, expenses, or losses 

Showcase the financial health of your company in real-time to see if there are inaccuracies.

Also, with RPA you can keep track of travel receipts when your employees are attending conferences. 

At the end of the month when all records need to be tallied and closed, RPA will make the process go smoothly because all the necessary data will be synchronized.

How to implement the changes

The first step to implement RPA is to set a realistic goal and scope for your accounting project. Not all accounts payable systems are still ready for RPA so it is crucial to be realistic here.

Accounts payable consist of two parts: transactional and decisional. So RPA will work the best with transactional processes. 

Determine the budget, and monitor the changes. It takes approximately a year for RPA to start showing its cost-effectiveness and for the automated process to reach its full potential.

Try standardizing your processes and workflow. The implementation phase is very important because that is where you will learn the mechanisms of how RPA automation tools work and how it can help your business thrive. It is important to consult a specialist in this field that will help you through this entire process — helping your business reach its full potential.

Tools for people, by people

The most important thing to realize about RPA in the accounts payable process is that these automated processes will not replace human workers or human ingenuity. RPA can only help in removing some truly unnecessary parts of your workflows and help you allocate your valuable resources to places where they will help your further growth. 

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