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RPA - Transforming Accounting and Auditing | EmergenTeck

EmergenTeck- Kausal Vikash
3rd Jun 2019
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RPA - Transforming Accounting and Auditing

Introduction -


I know people who wanted to become a doctor, an engineer or an astronaut when they were little with a kid's imagination. I would not even keep the option of becoming a pilot off the table. The wonderful thing about it is even a kid knows all about those top jobs floating out there that assure a comfortable life. These same people are happy to be who they are right now living a simple, satisfactory good life. But they always wished to be among top. So I can say, “I have learnt a true life lesson about human's inherent need of getting listed or included in top opportunities, top jobs and top carriers”. I consider, one of the top jobs that is on horizon is ‘Accounting’.


New technology is changing the future of accounting. Many accountants are afraid that Automation and Artificial Intelligence (AI) are going to replace their jobs. But that fear is misguided for two reasons. One being new technologies does not wipe out the jobs; it reinvents and even creates more jobs. For example when manufacturing of car started, it created an entirely a new industry of jobs centred onautomobiles like gas stations, repair shops, spare part manufacturers etc.That means, in today’s world, accountants will not be simply replaced by a robot, they will learn new skills and move into a specialised world. Second reason being, automation can change every aspect of accounting job but can only replace routine, non-creative and repetitive tasks.


So,No!Robots are not coming for accountant’s job but coming along-side them and taking up their routine and mind numbing tasks freeing them to move into advisory and new strategic world. But if Accountants ignore the pace of change, they may be left behind. In this climate of innovation, they must adapt in order to survive. Many accountants do not want the change, but the truth is automation is going to transform the accounting profession in next decade and they need to be ready. So how do they prepare? Accountants are likely to redefine themselves as strategic advisers.


Technologies like AI and ‘Machine Learning’ will make accountants more efficient. Accountants will communicate key insights to clients to build their reputation as trusted advisers. With changing world, accountants are up for a tough challenge in coming years ahead but if they learn new skills, stay open to new technology and anticipate the tide of change, they will be rewarded with greater opportunities in a more fulfilling way.


Robotic Process Automation (RPA) and Accounting:


There are several tasks done by accounting people and organisations. Many of these business operations are routine, repetitive, take a lot of time with missing deadlines and need lot of human efforts resulting data inconsistency. Robotic Process Automation (RPA) is the solution for all the accounting problems.RPA looks at ‘Tasks, Activities and Processes’including human intervention often times between systems. It sits on top like a macro in excel. It enables you to take electronic info from one system or source, do some level of manipulation of data or info, pass it on to a series of the subsequent systems one after another and simultaneously string them all together through a common platform of automation software that can also help in data extraction and integration needs providing robust and comprehensive access to any web based data source.


2016 saw a lot of focus on applying RPA on a back office outsourcing situations. Today, RPA works like a virtual accountant. It can prepare more accurate report in a less span of time. As per the analysts 50 to 70 % of manual efforts can be saved with RPA.


I think following are the best suitable cases for RPA in India:

1. Goods & Services Tax (GST): All the operations of GST like extracting and uploading invoices, monthly or quarterly filing of tax returns, inward and outward supply reports, real time records of ‘Operator of Warehouse’ and Transporter, inventory, input tax credit, output tax payable and paid records.


2. Tax deduction at source (TDS-Tax): Filing, monitoring and capturing the reason of rejection in an excel sheet with electronic alert through an email


3. CEO Dashboard: Capturing business performance across all units, status of all the projects and key performance indicators of organisational goals in a single view


4. Supplier ‘On-boarding’ and ‘Market Intelligence’ with constant mapping of competitors, vendors, customers, products, industries and different markets. The RPA automation starts with pre-selection of suppliers by buyers, verification of the supplier, and registration with supplier details like confirmation of access to Own Master Data, accept terms and conditions and accept the on-boarding invitation.


Once all the registration steps are completed, the supplier will receive link to supply chain finance log in portal. After getting fully on-boarded with one buyer program, the supplier will have chance to request participation in additional supply chain finance programs. RPA also enables self-registration of the suppliers to participate in a finance program even if they are not invited by buyers. They can also request for on-boarding from the buyer to make them visible.


5. Daily Profit and Loss (P&L) statement summarizing revenues, costs and expenses incurred during a specific period. P&L statements are required by law and need to be 100% accurate which can only be delivered by RPA bots.


6. Accounts Payable:

The entire invoice processing automation can be summarized in the following steps.

·        Extracting Invoices

RPA will extract the copies of invoices from email, workflows or a dedicated folder etc.

·        Reading the Invoices

Once the invoices are extracted, the Robot will read the specific fields in the invoices that need to be updated in the ERP (Enterprise Resource Planning)

·        Verification of the Invoices




RPA will verify the Invoice details like company code, supplier number, VAT etc. Verification is done with the database and if verification passes, it moves to the next step. In case the verification fails, either bot can be configured to skip that Invoice and move on to the next or inform the responsible person immediately to check what action need to be taken next or even send back the invoice to the vendor automatically.


·        Inputting Invoice details into ERP

Once the required information is gathered and verified from the invoices, RPA robot will open the ERP and key in all the fields that need to be filled. It can be in SAP, Oracle or whatever ERP your company uses.


·        Confirmation

Once the data has been successfully inputted in the ERP system, the robot will provide the confirmation. The confirmation can be over email for each Invoice or a consolidated email for all the postings. If you require a report with all the posting details in excel etc., it can be done. The entire configuration is highly customizable however the organisation wants. It is very important to select right RPA tools for the automation. There are a lot of RPA solutions available in the market.


7. Maintain data consistency:

RPA can avoid pain caused by incorrect data in the following mentioned cases just to name a few.

·        Purchase Orders (PO) raised to incorrect vendors- must be re-raised

·        Incorrect and invalid vendors causing frustration and uncertainties

·        Invoices held up in process due to data adjustment

·        Late payment fees

·        Invoices incorrectly paid to vendors- money lost


Through RPA organisation can enjoy the value of 100% data accuracy with consistent data extraction at all levels by its users providing consistent data integrity & confidence level, time savings, no more incorrect vendor payments and 80% cost reduction in processing time.


8. Order exception processing and Delivery Reconciliation


RPA allows organisations orchestrate end to end services to people. Let’s take a digitisation example. Here, we got an invoice being emailed in which gets picked up by small Optical Character Recognition (OCR) bots to scan, categorise and extract data before a ‘User Interface-Path’ bot updates the data into an ERP system.


At every point if the bot got wrong or it’s not confident about outcome, RPA lets you put a human in the loop to help resolve the issue. The humans can automatically pick up the next important activity against Service Level Agreements (SLA). Regardless of how human gets in the loop, RPA tool is their go to place. Validation station displays the specific issues to help them correct the data as necessary. Once they are happy with their changes, they mark as complete and can be passed on to ‘User Interface-Path’ bot to update the ERP system as the next part of the process. Logged into RPA digital operations platform as a team leader, a person can easily track this activity.


RPA can act as a governance platform where managers can see which resource is doing what work, where, when and why. It gives you end to end traceability on everything that human ordigital work force has done to deliver service to your customer.


Robotic Process Automation (RPA) and Internal Auditing:

RPA involves use of software robots to automate processes. The impact that it brings to an organisation is significant. It provides benefits in economic value, workforce advantages, quality improvements, flexible execution, speed and agility. But how does RPA affect Internal Audits? RPA may require changes to process which are in control. Internal auditors should understand RPA use and its impact on the risk profile.


Insurance management have established governance of RPA early and collaboration with key stakeholders to enhance the control environment as the process get automated. RPA can also increase internal audit’s productivity, expand its risk coverage and help address the on-going compliance burden by doing more with less. Lower value and repetitive manual auditing tasks can be automated and by using RPA to automate controls testing, inter auditing can test population of data, increase confidence that controls our design and operation effectively and free up our resources to focus on high profile audits.


Example (RPA in action):

Vendor Controls Testing will require an AP manager to log on to SAP, download the vendor change report, pull down appropriate approval forms and compare the changes manually noting any discrepancies for follow up. This is an ideal case for automation because an AP Manager performs a manual control to review vendor master additions and changes in SAP on a weekly basis. Due to nature of the control, it is a perfect candidate for Robotic Automation for IA testing of manual control.


With RPA in action, the robotic software bot will download the required forms from share point. The bot will read the input sheet for information necessary to generate the SAP vendor change report. Then bot logs into SAP, generates the report using the information read from the input sheet, exports the report to excel. The bot counts the total records on the report and selects the sample size based on the sample size sheet. The bot selects the random samples from excel SAP report.


According to sample size, bot finds the corresponding approval forms and compares values on reports and forms based on defined criteria on each example. The bot summarises results on the output sheet adding detailed information about the exceptions in a numbered fashion.

Thus RPA could change how internal audit works. Think about it! Where do you do repetitive manual testing? Where do you have tasks that require access to multiple or different data sources? These are good candidates for RPA.


Conclusion

RPA can deliver sizable improvement in productivity, cost and risk coverage. The opportunity is before us. It is time for Internal Audit to engage in the robotic action. RPA is quickly emerging as a must have enterprise capability. By automating low value repetitive human activities, bots can increase business productivity, create consistent quality and help operations scale. For certain manual activities, bots can generate as much as 3/4th of savings over traditional Business Process Outsourcing (BPO). That means using RPA risk and compliance functions can reduce costs. They can also better protect the business as bots have to drive productivity and more expansive risk coverage knowing when and how to best use the automation is the key to unlocking its value.





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