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Robotic Process Automation in Accounts Payable
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Accounts payable (AP) departments support the financial, administrative, and clerical sectors within a company. AP departments make payments that are owed by the company, release funds to cover vendor invoices or bills and track the company’s short-term financial obligations. Like any department that doesn’t generate revenue, AP departments contribute most to an organization’s success when running at peak efficiency. That’s why many Accounts Payable departments are turning to robotic process automation (RPA) to work faster and smarter. Let’s explore Robotic Process Automation in accounts payable (RPA for AP) in detail.
What are the responsibilities of an accounts payable department?
An AP department ensures that expenditures are appropriately authorized and processed. The department also documents monies owed to merchandisers, overseeing expenditures to maintain an error-free balance record. These tasks include gathering tax information from a company’s suppliers, remunerating workers for small business-related expenses, and organizing financial reports related to their work.
In short, it is the responsibility of the AP department to ensure that:
- All bills are accurate
- All bills are paid
- The organization’s cash position is maintained
As we’ve written before, wherever your team has well-established processes is where RPA can make an immediate impact. And few departments in your organization follow processes as well as the AP team. Still, it’s not difficult to see why many companies haven’t brought RPA to Accounts Payable.
Challenges that prevent AP departments from using Robotic Process Automation
While AP departments represent an obvious use case for robotic process automation, there are many reasons companies avoid doing so. Here are just a few of the Myths and Realities that impact RPA solutions for AP.
- RPA is custom software development. That’s expensive!
- We don’t have the resources to launch an RPA initiative.
- There are too many exceptions to the rules for us to use Robotic Process Automation.
- Our software can’t talk to any other software, so RPA won’t work here.
- Our employees are concerned about a bot replacing them.
Myth 1: RPA is custom software development. That’s expensive!
Reality: While RPA isn’t free, because it automates existing processes and generally connects to existing software, it’s much less expensive than most software projects. In fact, RPA customers tend to measure payback in weeks or months, not years!
Myth 2: We don’t have the resources to launch an RPA initiative.
Reality: Many times, organizations compare RPA to other custom software development projects staff have helped out with. Often, that’s not a fair comparison as RPA isn’t about doing new things; rather it’s about doing existing things in a new way. If your processes are understood and followed by all relevant parties, you’d be surprised how simple it can be to launch a few bots, particularly if you work with a partner like us.
Myth 3: There are too many exceptions to the rules for us to use Robotic Process Automation.
Reality: While we won’t say this is never the case, it’s been our experience that the more tasks are aligned to a calendar, the more successful processes you likely have in place. And since “month end” means something to every AP employee, let’s assume that means you!
Moreover, oftentimes the goal of RPA isn’t to have every invoice follow the same path. Instead, we’re seeking to automate the 80% that do, so that employees have the bandwidth to handle the exceptions. In short, the vast majority of AP departments find ample opportunity to craft efficiencies, simply because they are process-driven departments.
Myth 4: Our software can’t talk to any other software, so RPA won’t work here.
Reality: Again, it’s possible, but not likely. While modern software tends to be quite a bit more API-friendly, our RPA integration team has successfully liberated data from quite a few programs that pre-date the golden age of software innovation. By overlaying RPA over existing technology, our bots will automate the same keystrokes your staff uses to open a program and access the data.
Myth 5: Our employees are concerned about a bot replacing them.
Reality: Your employees are concerned that they are valued. Robotic Process Automation wasn’t invented to replace Accounts Payable workers, or any worker, for that matter. Rather, it’s a technology designed to remove portions of the non-value-added work that falls onto the average employee’s desk.
As organizations grow in complexity, these menial tasks tend to escalate in tandem. RPA allows employees to focus more attention on the challenges that only they can solve, thereby increasing employee satisfaction.
Robotic Process Automation in Accounts Payable: Three Bots That AP Departments Love
RPA bots excel at repetitive, manual work. They can complete such tasks much more quickly and accurately than a human worker. Here are three ways top AP departments utilize RPA for AP to save time and reduce errors.
1. Invoice Approvals and Matching
In a typical accounts payable department, a considerable amount of time may be spent routing invoices. RPA systems can automate the invoice approval process. Bots can receive invoices, determine to whom it needs to go, and rapidly submit them for approval.
In addition to routing invoices for approvals, bots can crossmatch invoices with purchase orders upon receipt, verifying that the company is being billed for the expected or agreed-upon amount. Bots can then flag any questionable figures and notify the appropriate worker of any disagreement. In the end, this bot elevates exceptions while allowing standard invoices to follow your established process.
2. Invoice Data Entry
RPA is an ideal platform for handling mailed and emailed invoices. Bots receiving scanned information can seamlessly enter it into an organization’s system. Because they eliminate the need for rewriting processes, bots remove the possibility of human entry errors.
In addition to handling data entry, RPA can bridge the gaps that exist between systems. If information needs to be moved from one software system to another, bots can transfer that data automatically, increasing the speed and accuracy of an organization’s data handling.
3. Payment Execution
By minimizing the number of times an invoice is touched, RPA systems can increase the quickness of payment execution for AP. These systems can calculate and compare figures to reconcile invoices to the general ledger.
UDig automated an accounts payable process for a logistics organization that saves the team 5 minutes per invoice and gives them 30% of their time back monthly. Read the full case study here.
Five Benefits of Robotic Process Automation in RPA Departments
Because Robotic Process Automation is inherently reliable and consistently productive, it offers numerous benefits to accounts payable departments, including the following:
- Streamlined capturing and matching vendor data – Automated collection and matching vendor data can save employees time on repetitive tasks while reducing company costs.
- Superior data accuracy – Information is processed automatically without the threat of human error.
- Speed – Automation increases the speed of the AP process, bringing about quicker reconciliation of accounts and increased turnaround time.
- Scalability – RPA provides users with the opportunity to start small and grow their automation.
- Cost savings – RPA users can measure their savings within weeks or months, NOT years!
RPA in Accounts Payable: The Final Word
RPA is a specific software solution, one that excels where processes are well documented and followed. Given both the repetitive nature of the work and its time-sensitive nature, most accounts payable departments have ideal use cases for robotic process automation. RPA should be considered by AP departments seeking ways to maximize efficiency and productivity.