More businesses are realizing the benefits of automating their accounts payable (AP) processes. The increase in efficiency and productivity, along with the added security and opportunity for new income have convinced companies to rethink their strategies and make automation a top priority. Just how far can automation take your business?
In today’s economy, reducing costs are as important as driving new revenue streams. Innovative technology allows businesses to take automation to the next level delivering workflow efficiency and lessening human effort and related expenses.
Robotic Processing Automation (RPA) is beneficial across all industries – financial services, human resources, retail and more. Let’s examine business-to-business (B2B) payments and look into the innovative technology of RPA.
What is Robotic Process Automation?
RPA is a program or software tool that automates manual, rule-based, and repetitive human activities, such as data entry. RPA is referred to as software robots or BOTS. RPA software robots work with your business systems and applications to simplify processes and reduce the administrative burden on employees. BOTS can automatically perform the actions of a human faster and more accurately, at a fraction of the cost and the time previously required. This minimizes the need for accounts payable staff to work on manual, repetitive tasks and enables them to work on higher value-add activities.
RPA tools do not replace business applications but automate repetitive data entry and other human processes. As an example, AP staff members record their keystrokes and screen activity as they enter data. The recorded activity is used by programmers to build scripts (robotic processes) that will mimic the staff member’s keyboard and data entry activities. Dependent upon the application, there may also be rules, logic, and artificial intelligence added to the scripts (i.e., amount of payments per cycle, limits on invoice amount, etc.). The BOT pulls in relevant data from specific locations to perform the functions without human intervention, such as invoice number, date, amount, payment type with the ability to add ‘auto-validation’.
Although there is upfront developer time to write the scripts and associated rules, once up and running, RPA saves countless hours of work on the back-end. In a recent study, it was determined that on average, to enter one payment into the system, it took a staff member 3-5 minutes. With RPA, the time of data entry was reduced to 18 – 20 seconds. With multiple invoices (200+) included in one payment file, it took a staff member 2 hours to enter all of the invoices to be paid. RPA reduced that to under 5 minutes. In addition to saving time, the bots log the inputs and outputs at every step of the process and can take screenshots of the pages, providing a fully maintained audit trail for the strictest compliance.
There are some limitations to RPA. The tool needs to perform the tasks of a skilled employee. They must record the data entry processes and a programmer needs to write scripts to mimic their actions. RPA is associated with individual clients. Data sources must be structured and unchanged. If there are any changes by the client to the file formatting, the RPA tool will not run as originally programmed and will need to be reprogrammed. There are error reports created after each use for staff members to review and to make adjustments, where necessary.
Even with these considerations, companies are seeing substantial benefits from robotic process automation.
RPA continues to advance, and its use in AP has become widespread, including ERP data entry, invoice processing, payments, and reconciliation. It enables businesses to revise their payments processes to reduce cost, increase speed, and improve accuracy. The cost of a BOT is estimated to be as low as one ninth of an FTE; and work as much as 20 times faster than a human resource.
RPA for B2B payments is a gamechanger. Businesses looking for a competitive advantage should be adding RPA to their strategy and plans for 2020. The excitement around RPA will only continue to grow as more and more financial professionals embrace this technology.