How Robotics Process Automation and the Pandemic Are Transforming the Accounting Industry
The COVID-19 pandemic has accelerated the adoption of robotics process automation (RPA) within accounting firms. As a recent Accounting Today article points out, “The pandemic is a call to action for accounting firms to seriously consider RPA to increase efficiencies and upgrade client services.” Accounting firms were well aware of the economic value of RPA even before the pandemic, but the forcing functions of a mobile workforce, the demand for better remote collaboration, and the need to contain costs have driven further interest in RPA. The ability to automate a wide range of activities without the need for complex programming can truly accelerate the journey to becoming a connected firm.
Although no expert could have predicted the tumult of 2020, a 2017 AICPA notice (referencing McKinsey Research and Forrester studies) stated that “the RPA market is expected to grow $2.9 billion by 2021” within the accounting industry. These studies reported that “40% of transactional accounting work is expected to be automated by 2020 (financial management) and [is] predicted to touch 230 million knowledge workers, 9% of the global workforce.” Fast-forward to today: It’s almost impossible to overstate the dramatic impact of (and need for) RPA.
What Is RPA?
So what is RPA and how can it help your accounting practice? Essentially, programmable software “bots” help accountants tackle important but mundane, time-consuming tasks involved with audit, attest, and tax work. Bots work like advanced Microsoft Excel macros that can function across multiple applications; however, bots can handle a much larger volume of data than a typical macro, such as general-ledger or ERP work that requires a lot of manual data entry. RPA replaces many types of manual processes and does it quicker than the macros of yesteryear.
AI and robotics expert Byron Reese, author of The Fourth Age: Smart Robots, Conscious Computers, and the Future of Humanity, says, “Artificial intelligence and robotics are poised to redefine what it means to be human.” Indeed, AI and RPA seek to eliminate those tedious, prolonged tasks performed by workers and, in turn, free up accountants and tax professionals to both focus on higher-level accountancy work and provide more value to the firm by leveraging their expertise to strengthen client relationships.
Why RPA Matters
Accounting firms compete against one another for market share, so they must do two things to garner selection as the accounting firm of record: They must be price-competitive and they must be compelling to clients. When accountants leverage RPA to handle much of their high-volume transaction processing, they greatly increase the operational efficiency of the firm, thereby saving on costs and attracting more clients.
Unlike human employees, RPA has no work-hours limitations. Bots can run 24/7/365, increasing productivity to levels traditional workers could never achieve. Firm leaders appreciate the increase in productivity, which offers them a competitive advantage with clients.
Accountants are using RPA successfully today for a variety of tasks, including accounts payable, accounts receivable, financial close, controller work, financial planning and analysis, expense management, and tax work.
Three Keys to Working With RPA
- Realize that humans must be part of the equation. Bots will never completely replace the accountant. Clients will always want and need expert financial and compliance advice. As many laborious, lower-level accounting tasks are replaced by RPA, accountants will be better able to focus on servicing clients for better satisfaction and retention, improving audit quality for the benefit of the investing public, increasing regulatory trust in the firm’s systems of service-delivery quality control, and improving engagement profitability for the financial benefit of the firm.
- Ensure your firm’s RPA technology is constantly evolving. Accounting automation began with simple Microsoft Excel macros and evolved into bots that process routine tasks much more quickly. Technology will continue to be a valuable business resource that enables firms to provide the next level of service. RPA must also keep advancing because regulatory rules and guidelines will change, and RPA tasks will have to change with it.
- Understand that RPA is not a magic bullet.RPA is an extremely useful technology, but it is not a standalone solution for every problem. When paired with high-quality finance department analysis and workflow standardization before implementation, RPA can yield major benefits.
The RPA Future Will Continue to Shine
Ultimately, robotic accounting results in reduced labor costs, shorter cycle times, increased accuracy, and simplified workflows. Although RPA is changing the face of accounting firms, it is important to remember that it will not eliminate human accountants. Because RPA reduces transactional data processing, accountants can focus on delivering higher-value financial analysis to help clients make better business decisions. Firm leaders will continue to focus on RPA solutions that keep up with the changing accounting landscape and serve as practical tools to manage repetitive tasks that cause operational inefficiencies.
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Process automation software can help your firm meet the evolving challenges of modern accounting and provide a strong competitive advantage. Visit intapp.com/accounting to learn more about exciting innovations revolutionizing the accounting industry.