Contributed on October 25, 2016

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Trintech Insights – The Impact of Robotic Automation on the Financial Close

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The Impact of
Robotic Process
Automation (RPA)
on the Financial
Close
Leaving the Robotic Jobs
to the Robots
R2R Insights
www.trintech.com
The Impact of Robotic Process
Automation on the Financial Close
Introduction “Highly educated
accountants and
financial personnel spend
65%+ of their time on
manual, low-value
processes”
Over the last couple of years there has been one topic of discussion in the
finance community that has been growing louder and louder: Robotic Process
Automation (or, because anything new has to have an acronym, RPA). But
what is RPA, how does it affect the close process, and how are other
companies currently utilising automation to transform their financial close?
Simply put, what RPA looks to achieve is the removal of menial and manual
data tasks, freeing up highly trained talent for analysis of data – giving it
context and meaning – and instead applying that creative intelligence to tasks
like problem solving and evolving the business. This not only delivers
improved value to the business but is also the type of high value work most
likely to attract and retain high quality people.
“Robotic process automation is software that emulates human
execution of tasks via existing user interfaces: it captures and
interprets existing applications, manipulates data, triggers responses
and communicates with other systems, it can be applied to existing
applications.”*
*EY – Robotic process automation in the Finance function of the future
www.trintech.com
The Impact of Robotic Process
Automation on the Financial Close
Introduction
This is achieved through the implementation of Automation Robots who can
work 24/7 at 100% accuracy. This has huge implications on the financial close
process and all its related sub processes.
As can be seen in the graphic on the right, this includes:
• Focusing on exceptions in Reconciliations
• Promoting best practice through Journal Entry benchmarking
• Identify risk areas and bottlenecks in the Close Management process
Over the coming pages, we will go into a bit more detail around these three
areas, however, these aren’t the only areas where you can save time, money,
and improve processes. To talk through anything you see in more details
please get in touch through our website.
Reconciliations Journal Entries
Close
Management
Managing
exceptions and
ensuring that all
controls are
operating
consistently
Identify risk areas
and bottlenecks
and
communicate
potential issues
early and often.
Promote
teamwork among
dispersed finance
teams (and
external auditors)
Review and
approve key
journals and
analyse current and
past period
journals in real
time, promoting
best practice
through
benchmarking
Which Jobs Are For Robots And Which For People?
Robots
People
Ensure the
quality and
consistency of
source data.
Perform
matching and
raise exceptions
to be reviewed
Pull information
from all sources.
Track all tasks
and ensure that
they are routed
to the
appropriate
people and
escalated where
required
Manage journal
validation,
routing through
risk based
intelligence, auto
approval and
posting back to
the ERP
www.trintech.com
The Impact of Robotic Process
Automation on the Financial Close
Reconciliations
In terms of reconciliations, we tend to spend most of our time simply
gathering data before we can even begin to think about reconciling it. Once
the data is finally in the right format, the majority of our time is then spent
manually going through the matching process, rather than spending that time
focused on the areas that are most critical to us, as can be seen in the
diagram on the right.
Automation ensures we spend the majority of our time in the world of
exceptions. Our priority is to focus on identifying core issues, as to the
reasons for the exceptions, and identifying potential initiatives to improve the
process so these exceptions decrease over time.
By inputting it through an automated workflow, you can also push the
exceptions through discovery, research, resolution, and bring it back to a
single view where all financial statements are being reconciled.
This all leads to a focus on what is important, rather than just simply
providing data.
Data
Management
Matching
Exceptions
Traditional, Manual
Time/Effort Split
Best In Class Split
Utilising RPA
With a manual process we are spending all of our time with data
management and matching, period after period. With automation we can
reverse this to focus on our critical tasks.
www.trintech.com
The Impact of Robotic Process
Automation on the Financial Close
Journal Entries
When it comes to Journal Entries, most companies will be managing
hundreds, if not thousands of these a month, in fact one Trintech customer is
currently managing 50,000 every month within our automation solution.
Automation greatly reduces the burden of this on your team, and increase
the efficiency and quality across the business.
On the right you can see an example of how this works when you introduce
robots to the process. Not only are you validating that the journal is complete
and accurate, reducing the number of Journals that need a human touch by
auto approving any that don’t have a material or financial impact, you are
also enabling the robots to route any that do straight to the appropriate
individual and follow these up to resolution.
With this increase in visibility, you can also start to benchmark across your
business units, entities and/or geographies. For example, are there some
divisions that have much higher task counts than others, why is this the case,
and how can we identify and share best practice?
JE
Created
Is there a financial
impact
Who has
ownership of the
journal
Yes
No
Is it complete and
accurate?
Flag any errors
and automatically
send these to the
individual
responsible
No
Send to BPO,
Captive, Local
individual
responsible for
approval
Yes
Automatically
post directly to
the ERP
Robots
www.trintech.com
The Impact of Robotic Process
Automation on the Financial Close
Close Activities
The close process as a whole requires the input of numerous different data
points from multiple systems and the collaboration of different individuals
and teams. Currently in the majority of companies this is managed outside
the ERP through emails, spreadsheets and calls.
Robotic Process Automation enables companies to keep their existing
technology landscape and have the robots listen, monitor and react to any
developments.
This means that no matter what ERP is in place, and irrespective of how many
instances or different types we have, they can automatically close out, or
create any tasks and activities that are related to that action while
maintaining a full audit trail.
What this does is greatly reduces bottlenecks, improves accuracy, and
reduces the overall time to close.
The common adage in terms of speed, quality, and cost states that you
can essentially only pick two. In other words, if you want something done
quicker and better, you will have to pay for it. If you want something fast
and cheap, be prepared to have the quality reduced.
The beautiful thing about putting in place Robotic Process Automation
technology is that you can have your cake and eat it too. For example.
best in class companies are managing their reconciliations with improved
quality, at as much as a 95% reduction in errors, improved speed, with up
to 99% of routes automatically reconciled before the day begins, and at
reduced costs today and tomorrow.
Automation is all about the ROI and enables you to take these efficiencies
and savings and sell them internally within your business. One final point
to bear in mind though is that it’s not only about cost control today, but
also about cost avoidance tomorrow. If you are looking to grow your
business, automation helps you do this far more efficiently and effectively
as you expand and develop as an organization.
Better
Faster
Cheaper
www.trintech.com
Automation Enables You To Work:
Better, Faster, And Cheaper
Automated exception item identification, including
necessary reporting, escalation and subsequent
approvals, helping to eliminate bottlenecks and
work slow-downs
Monthly closing time has been reduced through the
automated exporting and subsequent GL uploading
of O&S, NSF and bank fee information directly
from ReconNET
Accounting staff productivity has doubled,
representing an annual soft dollar savings in excess
of $120,000
www.trintech.com
If you’d like to know more around this topic, please click on the relevant
links below:
• The Impact of Robotic Process Automation (RPA) on the Financial Close
(Webinar)
• Enabling Record To Report (R2R) Transformation Through Technology
(eBook)
• AstraZeneca Discovers $2.5 million in Savings By Automating Closing
(SAP Insiders)
Or, if you’d like to get in touch to see how Trintech can help you gain value
from automating your Record-to-Report processes please:
…with systems that are well integrated, automated and accessible via the cloud,
with on-demand access to assess performance metrics. To that end, Deloitte
neatly sums up the utopian close that organizations should strive to be¹:
• Risk-Based: Efficient allocation of resources is based on the risk of
misstatement of the underlying balance
• Automated: Technology is leveraged to allow full automation of elements of
the close and to accelerate other dependencies such as data collection
• Transparent: Dashboard reporting provides management with visibility into
the status of the close while highlighting areas of potential error
• Consistent: Accounting procedures are applied in a uniform manner, across
divisions and locations
• Segregated: There is a clear chain of command to allow effective review and
oversight
• Auditable: Results of the close may be audited by external and internal
auditors in a highly effective manner
• Platform Agnostic: Data can be pulled from various systems in different
formats
• Timely and Efficient: Results are published in a timely manner, with a low cost
Visit: www.trintech.com
Email: info@trintech.com
Or Call: Americas: +1 972 701 9802
EMEA: +44 207 628 5235
APAC: +61 3 9225 5239
Conclusion: Take Control Of Your
Complete Process
¹Source: Deloitte “Balance Sheet Integrity – The Utopian Close:
Creating a low risk, highly effective financial close”
Want To Find Out More?
About Trintech
Trintech is the leading provider of cloud-based financial
software solutions for the Record-to-Report process. Over
1,700 clients in more than 100 countries – including half of the
Fortune 50 – rely on our solutions to optimize resources,
reduce costs, manage risk and monitor activities across the
entire finance organization worldwide.
Trintech’s Cadency™ software manages all aspects of the
financial close – from automating and managing balance sheet
reconciliation, journal entries, to governance, risk and
compliance, and financial reporting. ReconNET™ streamlines
daily operational reconciliations such as bank and credit card
transactions.
Trintech has offices located across the US, UK, Australia,
France, Ireland, the Netherlands and the Nordics, with partners
in South Africa, Latin America and across the Asia Pacific
region. www.trintech.com.
© Trintech 2016. All rights reserved
The information contained with the document is given in good faith
and is believed to be accurate, appropriate and reliable at the time
it is given, but is provided without any warranty of accuracy,
appropriateness or reliability.
www.trintech.com