With a wide range of applications, robotic process automation is no longer simply science fiction. Although financial firms have begun incorporating digitization into various aspects, journal entry remains for the most part manual. 

With technology evolving to meet changing complexities, time-consuming and labor-intensive tasks can be replaced by Robotic Process Automation (“RPA”). It is usually deployed in segments where operators have to perform high volumes of repetitive, rule-based tasks without the requirement of any decision making.

Disadvantages of Manual Journal Entries

• Workflow bottlenecks
• Increased risk of human error
• Limited real-time visibility
• Lack of standardized protocols
• Wasted time and labor
• Increased risk of fraud

What is RPA?

RPA works as a software bot capable of being programmed to do the functions of a human operator such as using computer programs. This improves overall performance and efficiency by a significant degree. RPA in concert with human operators improves the quality and efficacy of end-to-end operations.  

How does RPA work?

In most cases, automation replaces human operators. However, Robotic Process Automation does not work by reducing the workforce. Rather, it contributes to an improvement in efficiency and performance by streamlining operational workflows. RPA influences data entry in the following ways:

1. Increased accuracy and confidence in the integrity of the balance sheet through differential access, allocation of tasks, standardized workflows, and improved visibility.
2. Reduces the likelihood of fraud through increased measures for cybersecurity for accounting firms , such as greater access controls and improved transparency.
3. Accelerates data collation when vast amounts of data from disparate sources need to be compiled into a single format.
4. Works in concert with personnel through the data entry process resulting in the elimination of human error, maintenance of data quality, and consistency.
5. Aids in linking external systems as third-party systems are usually connected through digital means.
6. Saves money by reducing the need for paperwork, printing, and storage.
7. Time-consuming, labor-intensive tasks are now processed faster allowing accounting personnel to focus on details such as strategy and analysis.
8. RPA is of immense value in data cleansing, data extraction, data enrichment, data deduplication, and data mining. Specialized agencies that undertake data entry for firms, actively employ RPA for the entire data processing cycle.
9. Streamlining the end-to-end data processing lifecycle from entry to report generation through access to real-time and historical information.
10. Automates various segments of the workflow process, improves accuracy, and enables the practice of Continuous Accounting.

Why Sentient Solutions for Accounting?

Sentient Solutions helps CPA firms digitally transform in the world of Modern Finance with improved efficiency and accuracy. We streamline your entire journal entry process by applying automation where it counts. As an agile, adaptable company, we can fit into your clients’ business processes regardless of which systems they use or their maturity level as a business.

Our system frees up more time for accountants, allowing for better analysis, review, and strategy to drive your clients’ businesses forward. We combine expertise with accounting technology, offering high-quality back-office solutions in India, and mastery of robotic process automation technology (RPA). 

We ensure all our personnel possesses critical thinking skills, extensive experience, and technical proficiency. 

The post Streamlining the Journal Entry Process with Robotic Process Automation (RPA) appeared first on Sentient Solutions.

Let’s consider accounting as an example; It is a process-oriented function that is predominantly paper-driven and requires the same set of processes to be performed repeatedly. Since it comprises a repetitive set of tasks, the workforce is under immense strain, in turn increasing the scope for human error. And in the context of a CPA firm, the human effort involved to carry out these processes is simply humongous.

Adopting Robotic Process Automation in accounting helps automate back-office accounting processes to produce high-quality, accurate results. 

Advantages of Using RPA in Accounting

When we talk of automation of accounting, a common query we are often faced with is the difference between Excel macros and RPA. So what makes RPA different? Is it really more beneficial than using standard Excel macros? The answer is yes.

To begin with, we use Excel macros to automate repetitive keystrokes that help create and edit spreadsheets, only in Excel. While they do reduce production time, macros are used in only one application. RPA technology, on the other hand, can be used across any accounting application and data storage system.

Essentially, Robotic Process Automation in accounting acts as a bridge between all the applications that a CPA firm uses on a day-to-day basis. 

Some of the most prominent benefits of using RPA technology include:

• 24/7 Performance – Unlike humans, RPA applications have no time constraints. They can work non-stop, in turn increasing the firm’s overall productivity.
• Freeing-up employee time – RPA reduces the human effort involved in carrying-out slow and repetitive tasks. Hence, employees can use their time in a strategic manner and take-on more value-added tasks.
• Customizable workflow – Depending on the requirement, an RPA application can be customized to carry-out specific parts of the accounting process. Additionally, it can also carry out multiple processes at once, such as accounts payable and receivable, expense management, tax calculation, and report generation. An efficient RPA application can scale to meet the demands of the CPA firm.
• Non-invasive application – RPA applications do not interfere with or require a change of the existing IT infrastructure. Instead, RPA technology integrates itself as a layer or bridge on top of or across the existing infrastructure.
• Reduced error-rate – The automation of tasks produces consistent and accurate results, thus reducing the probability of error in the output.

Use Cases of RPA in Accounting

Accounting comprises many functions, all of which can greatly benefit from Robotic Process Automation technology. Here are a few examples of how RPA is transforming accounting.

1. Accounts Payable and Invoice Processing

With RPA, we can set up workflows to manage different vendor payments automatically. All we have to do is enter the data and let the application prepare and process the payment.

The software validates each invoice against the defined data fields to extract the information and store it in a financial database. We can also configure it to separate invoices based on vendor, client, location, etc. Additionally, separate workflows can also be created to approve the account’s payables and process bulk payments. When processing approvals, the application forwards the received invoice to the appropriate authority as defined in the workflow.

If more than one person needs to sign off, then the application automatically progresses from one person to the next until the approval process is complete. This drastically cuts down on process lag that often occurs when having to wait for the invoice to pass from one authority to the next.

When you use an RPA solution by Sentient Solutions, the application will automatically review, process, and obtain approvals for all vendor payments.

2. Tax Management

RPA applications can extract data from physical tax forms and populate the information into digital tax forms. We can configure the application to carry out many rule-based tasks such as:

• Data extraction and information gathering
• Data validation
• Running reports
• Calculating taxes based on compliance norms
• Calculating transfer pricing or international exchange rates
• Managing workflows
• Calculation of adjustments
• Information population into work papers or tax software

3. Regulatory Compliance and Reporting

Regulatory compliance and reporting involve multiple departments, systems, and applications. At Sentient Solutions, RPA technology is designed to ensure timely and insightful reporting that can add significant value to your business.

The RPA software automates tax-related tasks such as capturing and manipulating data to auto-generate regulatory reports, closing out sub-ledgers, delivering financial filings to jurisdiction-specific regulatory authorities, optimizing the end-to-end tax management process, reducing risk, and cutting down on costs. Using an RPA for reporting also helps you maintain a detailed audit trail.

Conclusion

Although RPA in accounting is a relatively new niche, it is one that holds great potential. Globally, we are seeing CPA firms, banks, and other finance bodies adopt RPA to bring in cost efficiencies, process optimization, and deliver accurate results. From being deployed to handle simple, repeatable tasks, RPA technology today has evolved enough to bring intangible change and improvement in accounting.

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