RPA leading the way for finance transformation
Estimated reading time: 7 minutes
Loreal Jiles, Director of Research, Digital Technology and Finance Transformation at IMA or Institute of Management Accountants, recognises the usefulness of technology. She talks to Enterprise IT News about how tech is reshaping finance and accounting teams.
EITN: What is the profession’s general stance/approach towards technologies like RPA? Has there been a change over the years?
Loreal: Technology is reshaping the way finance and accounting teams deliver value across the globe. Increased data accessibility and digital advancements in recent years have served as catalysts for the profession’s transformation. The global finance and accounting profession recognizes the importance of digital technology and, in large part, accepts the integral and revolutionary role technology can play in operational and value delivery.
While 10-20 years ago, digital transformation was either not on the finance team’s radar or mostly prevalent in the largest enterprises, today, many finance leaders have already begun their team’s digital transformation journey. This evolution in mindset, resource allocation, and action was prompted largely by business demand. Business leaders are demanding more of their finance and accounting functions.
Strategic decision support, data-backed insights, and efficient analysis are now expected. Yet, technology is advancing at a faster pace than the digital skills and capabilities of finance teams who need to leverage these tools. This disparity places the profession in a race for relevance. To win this race, the profession’s leaders are aggressively embracing emerging technologies, playing leading roles in organization-wide digital transformation initiatives, and investing in the upskilling of their teams.
Table of contents
- EITN: What is the profession’s general stance/approach towards technologies like RPA? Has there been a change over the years?
- EITN: Can you share some top examples of how technologies like RPA are being used by management accountants?
- EITN: Can you share examples of how finance and accounting roles are changing/evolving over time (without technology)?
- EITN: Can technologies like RPA help these professionals free up time for value-adding work?
- EITN: Will technology ever completely take on finance and accounting tasks? What are some of the best practices you have to share, to help ease technologies into the profession, so professionals may use it to complement and enhance their tasks and roles?
Although the COVID-19 pandemic has negatively affected the resources available to some finance teams to invest in digital technology and capability development, it has also accelerated the need for digital transformation. Finance and accounting teams that were already leveraging workstream collaboration tools, efficient operations, and advanced analytics, found themselves well-positioned to support their organizations through unprecedented times. Those who had not yet done so were forced to quickly pivot and are certain to have a greater appreciation for digitizing their workforces with urgency.
EITN: Can you share some top examples of how technologies like RPA are being used by management accountants?
Loreal: Leading robotic process automation (RPA) software vendors have transparently shared that most enterprises, regardless of industry, begin their RPA journeys in the finance and accounting department. The greatest impact is on tasks traditionally performed by entry-level finance and accounting staff and finance and accounting shared service centers. Examples of finance and accounting processes commonly automated by RPA are accounts payable, accounts receivable, reconciliations, payroll, data entry, monthly close processes, and control testing, among others.
Intelligent RPA or intelligent automation – the sophisticated pairing of RPA and artificial intelligence (AI) – enables a virtual robot to learn as it processes transactions. For management accountants, this could mean a bot leveraging optical character recognition to read and process invoices, increasing accuracy as more invoices are read.
Beyond RPA, management accountants are using advanced analytics to better manage cash flow, identify top products, forecast demand, assess employment levels, and evaluate financing and investment options, to name a few. Finance and accounting teams also use data visualization tools to understand how key financial metrics, such as sales revenue, change over time, and inform and present scenario analysis.
EITN: Can you share examples of how finance and accounting roles are changing/evolving over time (without technology)?
Loreal: Accounting has been successful in evolving over the years and is still undergoing a major transformation. Industries such as logistics, sales, and marketing have transitioned from paper-dependent workflows to automated ones, and some accounting teams today are still somewhat dependent on spreadsheets, word files, and even paper to manage day-to-day processes.
Through increasing investments in advanced technologies, finance is undergoing a shift from being reactionary and transactional to becoming a more proactive and analytical function with the agility to respond to business needs as they arise.
In a survey conducted by IMA and Deloitte, the insights gathered show finance at the precipice of a huge reset, spurred on by new technology and more pressure to add value while containing costs. The survey, “From Mirage to Reality: Bringing Finance into Focus in a Digital World,” captures critical data on finance’s progress towards intelligent automation and the adoption of technologies like RPA, cloud-based accounting solutions, blockchain, machine learning, and AI. While technical accounting is still an important foundation, accountants are being called on to demonstrate decision making, strategy, and leadership skills.
EITN: Can technologies like RPA help these professionals free up time for value-adding work?
Loreal: Absolutely. Automation is here to stay. Digital teammates are already on the payroll and leadership is assigning them finance and accounting tasks. The capability of existing automation tools can partially or fully support automation of over half of traditional finance and accounting processes.
The long-term success of the profession’s digital transformation will be informed by the extent to which we are able to effectively leverage data analytics. And getting the time to develop analytic competencies and apply those capabilities generating insights and delivering greater value is dependent on operational efficiencies – most likely gained through process reengineering and the adoption of emerging technologies.
EITN: Will technology ever completely take on finance and accounting tasks? What are some of the best practices you have to share, to help ease technologies into the profession, so professionals may use it to complement and enhance their tasks and roles?
Loreal: Digital technology will never completely take on all finance and accounting tasks but many individual accounting activities are capable of being fully automated. While transactional roles like general ledger, accounts receivable, and accounts payable are likely to be impacted, other higher-skill roles like financial planning and analysis will still be in high demand. Additionally, finance and accounting professionals can focus on timeless roles in the areas of accounting policy, strategy, financial investment analysis, and business and financial project management, along with a host of others.
For management accountants eager to upskill, the most important step is to START. Key technologies worth learning more about are RPA, data analytics, and data visualization. Inquire about the digital modernization initiatives underway at your organization and, if possible, align your development with that plan. For example, if you are in financial planning and the organization has already rolled out Tableau or PowerBI, develop skills in the tool that you will be able to use at work. If the RPA journey is already underway, learn which RPA platform was chosen and check that vendor’s website for free training, which most leading tools offer. For data analytics, consider starting with Python or R.
Key technologies worth learning more about are RPA, data analytics, and data visualization. I
For leaders looking to progress or accelerate a digital transformation journey, IMA’s research on RPA: “Transforming the Finance Function with RPA” identified 3 keys to scaling RPA that broadly apply to any of the digital technologies covered in this article:
1) Establish governance.
2) Don’t compromise on resource quality.
3) Choose the right processes.
The finance and accounting profession is rising to the challenge of developing digital capabilities, delivering greater value, and efficiently supplying data-backed insights. Management accountants are encouraged to take action to upskill now. Finance and accounting leaders are admonished to form agile finance functions as well as create the space and provide the resources for their teams to develop, fail fast, and excel. The future is bright but different.
IMA’s best practice on how to leverage RPA for finance functions
- Establish governance
- Don’t compromise on resource quality
- Choose the right processes to RPA-ify