Robotic Process Automation in Accounts Payable: benefits and challenges

  • 12 Jan 2022
  • AP Automation
Robotic Process Automation in Accounts Payable: benefits and challenges Image

Chances are you’ve heard of the term “RPA,” short for Robotic Process Automation. It’s not a new terminology in business and finance, but it has become a “buzzword” of late and has the C-suite investigating whether it’s the right solution for their organization. And for some companies, RPA can be a useful tool to satisfy their organizational needs. But for many others, RPA can only scratch the surface of automating complex challenges, such as those within the accounts payable function. 

What is Robotic Process Automation?

The genesis of RPA started from solving the problem for organizations that found themselves copying and pasting data between multiple business systems, such as accounting files and their ERPs. This manual and tedious task was a huge time suck for their staff that could be solved by creating a script that could perform the task without the need for human intervention. These were straightforward robotics, written individually to perform a single task and without much flexibility. 

In the last 20 years, RPA has advanced beyond these initial, simple robotics. Some solution providers have unlocked more flexibility by weaving Artificial Intelligence (AI) into the code of the RPA, so that the robotics can learn from historical data and patterns to establish rules for how to handle dynamics scenarios. While this advancement has helped RPA to create more value for organizations, it still cannot unlock the more challenging, business-critical requirements for enterprise companies looking for true, touchless accounts payable automation. 

Advancements in accounts payable automation 

Along the path of RPA’s evolution, automation solutions with more robust capabilities were also unlocking potential value for end-users with new technology, including similar AI functionalities that brought RPA additional value. But these technologies were built to perform more complex tasks, and bring other areas of the AP and procure-to-pay process under the umbrella of automation. 

In early 2000, Optical Character Recognition (OCR) unlocked a further wealth of data that could enter into the automation process, and with that data came a boom in the automation market. Critical data from financial documents were now digitally captured and processed by these newly developed systems, eliminating the need for manual keying and copying and pasting. And that data could then be compared against filters and templates set up to match against pre-existing data in the ERP. It could also be assessed based on business logic rules that enabled important documents, like invoices, to be automatically processed for payment or flagged and routed directly to the appropriate reviewer for a next step. All of this was done without ever requiring a person to touch it. 

Modern accounts payable automation picks up where RPA leaves off

These robust systems have a key feature where RPA is limited, and that feature is flexibility. Modern automation has evolved to deliver intuitive user features, such as point-and-click configurability that a business user can set up and modify to adapt to varying business needs, without needing to bring in IT resources. This configurability is delivered from the moment of deployment, whereas RPA requires additional functionality to be written within the code of the robotics, often starting from scratch for more complex functions. 

Cloud-based accounts payable automation solutions offer even more flexibility for businesses. Upgrades and fixes are pushed to the solution on regular instances, without any need for the organization to spend time or resources to begin using new features. RPA, on the other hand, must be manually upgraded or fixed, with IT or solution providers needing to access and rewrite code first. When you think on the scale of a multifaceted accounts payable process with dozens of different functions relying on automation, it’s clear how difficult, costly, and time-consuming that would be. 

Lastly, RPA relies heavily on the data provided by the organization, whether that’s through manual keying and entering or a separate data capture tool. This adds further room for error, as manual data entry is known to be problematic. And connecting outside systems with RPA requires layering coding to ensure that the data is processed according to business logic. Also, advanced data capture, such as line-level data, is nearly impossible to automate with RPA simply due to the number of variables involved with different invoice formats and business rules. True AP automation not only provides data capture in one, holistic solution, but can intelligently process incredible levels of detail from documents, and apply them to the out of the box best practice workflows to deliver a high degree of automation. 

The current AP automation market

The decision between RPA and accounts payable automation is further complicated by an accounts payable solution market that can be a confusing world to navigate. AP automation is often used as a label for several different solutions, including RPA. In many ways, these solutions do encompass automating various aspects of the accounts payable process. But their individual potential value can be very different, so organizations need to assess what their priority needs are and make sure they address those first with the solution they choose. Some solutions that commonly fall under the accounts payable label are: 

  • eInvoicing - Invoice scanning software
  • Invoice workflow automation - Supplier portal - Payment platforms

When it comes to choosing a solution that’s right for your organization, it’s essential that you stick to the scope of the challenges you’re looking to solve. For example, if eliminating manual steps and raising your level of touchless invoice processing in as little time as possible is the end-goal of your project, a supplier portal is likely the right fit for your organization. Or if you process a relatively small volume of invoices but need a streamlined way to pay suppliers and combat fraud, you’re better off choosing an ePayment platform than an eInvoicing tool. Once you’ve landed on the scope of your process, you can follow the steps of identifying your system dependencies, assessing your current IT resources then researching and vetting vendors against these requirements to land on the best automation solution for your unique business needs. 

The realm of technology for finance has progressed an impressive amount in the last 20 years. And it continues to expand as new technologies make it possible to automate further and unlock efficiency and control for organizations of all sizes. Arguments against implementing accounts payable automation are dwindling as solutions become easier to deploy and more attainable through cloud-based delivery and pre-connected ecosystems within ERPs and solution providers. By thoroughly understanding the needs you’re looking to solve for your business and researching the best solution to resolve them, you’re on a fast track to true automation. This means impressive gains in efficiency, visibility and control of your company’s financials. 

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