South Africa’s finance professionals are no strangers to change, but the growth of robotic process automation, known as RPA, may make even these seasoned observers sit up and take note. By Kavita Vanmali

Robotic software is set to be one of the biggest trends impacting corporate bottom lines and one which will make the job of the chief financial officer or company financial director that much easier as he or she is increasingly called upon to play a more strategic role.

Robotic process automation (RPA) refers to robotic software that is able to automate repetitive, rules-based tasks and processes. These software applications can be scaled up or down as needed and can be scheduled to run daily, weekly or monthly – even in the middle of the night or during quiet periods. Within the finance and accounting department functions, RPA can be used to speed up processing time for tasks such as payroll, travel and expense reports, vendor invoicing and payments, credit control, fixed assets and general ledger. Typical processing time for month-end transactions can be reduced from the current average of four days to substantially less – while taking away strain on staff members. We find that clients initially implement RPA for these high-volume, low-value tasks, thus freeing up employees to focus on more complex tasks, allowing CFOs to bring diverse skills together to allow for greater input into business decisions and creating capacity within their teams.

All of this helps companies run much tighter ships. They’re able to reduce their turnaround times, allowing transactions to be processed far more quickly, while reducing error rates. By implementing RPA, companies can realise cost reductions of between 30% and 65% for onshore operations, and from 10% to 30% for offshore operations. Implementation costs are recovered within nine to 18 months, and RPA can be integrated with existing infrastructure and systems.

In addition, RPA can also assist with complicated data analysis almost in real time. It offers more strategic value to companies across sectors and business functions. This faster processing time and greater accuracy means that transaction risk is reduced, while companies can spot potentially illegal activity – for instance fraudulent expense claims or tender documents – much more easily. That’s because RPA can process employees’ disclosure statements and automatically examine account openings, statements, and expense claims, beefing up internal audit capacity and flagging items where appropriate for more detailed investigation.

Furthermore, robot software can analyse a company’s risk profile for trends and even determine potential causes underlying changes in risk exposure. It can analyse credit limits and immediately generate recommendations for further action should these limits be breached, as Forbes magazine reported recently.

RPA can be an essential tool for companies who need to make high-stakes decisions that affect their future business growth. For instance, RPA-generated analysis can help companies to keep track of capital expenditure and new infrastructure investments, mapping data from various sources on the same graph, and enabling them to take decisions as soon as risks or opportunities arise.

Here are some examples of the non-financial benefits RPA can deliver:

  • A major bank delivered a reduction in error rates from 30% to almost nothing for a highly data intensive process.
  • A professional services firm delivered improved turnaround times for standard management reports thanks to overnight processing of files by RPA.
  • A financial services company was able to run a checking process each night rather than once every two weeks which removed a small percentage of cases from the work stack. The cost of doing this daily with humans would have been prohibitive but with RPA it delivered a worthwhile marginal gain.
  • A professional services company delivered improved management information that enabled it to understand their key performance indicators better and communicate more positive and constructive messages to its customers.

Frequently – and understandably – clients are interested in RPA because of its cost-saving ability. However, RPA can also help them to scale up in a strategic way while helping them to offer greater value to clients and customers.

Author: Kavita Vanmali CA(SA) is a director at Deloitte