Robotic Process Automation in Accounts Payable Functions
Although Accounts Payable is a prime facet of Finance Operations in any business, it is one of the most resource intensive tasks and therefore a major cost center for your organization.
With the rising presence of Robotic Process Automation in many other verticals, there is a push to introduce the same for AP functions. All that remains to be seen is whether your organization’s AP function is ready, both culturally and technologically, to be run on automation.
The allure of RPA rests with the ability of ‘robots’ to work more efficiently than a full time employee at a fraction of the cost. While they are rigid in their rules-based, pre-programmed models, they offer immense flexibility in handling transaction spikes. Drastically increasing the ‘headcount’ in virtual operations is a relatively simple procedure and doesn’t incur heavy overheads.
RPA has some downfalls when it comes to AP functions. The problem most critics of RPA tout is the frequent human intervention that an automated AP process would require.
Due to issues such as inconsistencies in invoices and problematic Optical Character Recognition (OCR) tools, they claim the process will only become more complicated. For example, in cases where a vendor might raise a non-PO invoice, human interaction with the vendor is crucial to understand the items in the invoice. If you employ a wholly robotic approach in this scenario, you might end up with a greater mess.
Additionally, there is concern that bulk-programmed bots may multiply inefficiencies if the processes they handle are not standardized and optimized beforehand. This can lead to payment chaos and wasted man-hours.
In a nutshell, a wholly automated approach may not make sense without artificial intelligence to drive necessary conversations. An alert based system on the other hand can quickly reduce inefficiencies in your existing system.
Solutions on the market and the methodology
The drive for process improvement is not a novel undertaking. Most business small and large have worked hard towards increasing efficiencies and standardizing processes. This boost has led to a feedback loop, generating more dedicated players who develop robotic technology suited to AP. As a direct result, high performance is now more affordable.
While RPA can improve the speed and accuracy of processes, you must deconstruct your existing methods to effectively apply rules-based decision making to all your functions. The notion that robots can completely replace humans is invalid at this juncture of technological advancements. However, you can deploy a workflow that takes advantage of technology by harnessing the potential of carefully placed human touch points.
The final word
RPA is not the Matrix, but it can amplify your efforts by freeing up valuable resources. It is reliant on standardized, mature AP processes, and it boosts compliance and e-invoicing capabilities. It also supports decreasing margins with low overheads, while improving speed and accuracy.
In the future, we will see Analytics and Big Data drastically change the AP operations landscape, further improving efficiencies and creating positive business impact.