The Benefits of Robotic Process Automation in Accounting
One of the challenges companies may encounter in their digital transformation journeys is dealing with the limitations of legacy infrastructure. Associate Professor Kevin Ow Yong from the Accounting Technology and Innovation Centre (AccTech Centre) at SIT shares how adopting the right smart automation can help.
- How Robotic Process Automation (RPA) tools can be used to automate tasks in the accounting industry
- What companies should know about RPA
- How SIT’s AccTech Centre can help companies digitalise their business processes
Robotic process automation (RPA) is one of the three key areas that the AccTech Centre at SIT relies on to fulfil its mandate of helping small and medium enterprises in the audit industry digitalise business processes. What is RPA and is it easy to implement in accounting?
RPA occurs when tasks are automated through software or hardware systems. The overall objective of the software is to reduce the burden of completing repetitive, simple tasks. Essentially, the software or robot can be taught a workflow with multiple steps and applications. Simple RPA applications include mundane tasks such as sending an email message, checking and ensuring the form for completeness, filing the form in a folder, updating a spreadsheet with the name of the form, the date filed, and other data fields.
For a field such as accounting, where workflows are complicated and repetitive, RPA has the potential to streamline many processes, reducing the manhours (and rate of human error) that go into these repetitive tasks. However, the ease of implementation really depends on the type, scale, and complexity of RPA projects.
Visit this website to see a list of 67 different RPA use cases across functions and industries.
Could you share an RPA project that the AccTech Centre at SIT is working on?
One specific project that we have done with a small and medium audit firm is to combine RPA and AI tools to simplify and expedite their bank confirmation process. And we call this technology ‘intelligent automation’. The traditional way of performing a bank confirmation process is a very tedious, time-consuming process. The audit firm that we are working with is looking to automate this entire process.
This is how it works:
Step 1: Auditors will send a bank confirmation request.
The audit firm will send individual bank confirmation requests to banks, which have a banking relationship with the audit client (“company”). In this bank confirmation request, the letter will indicate what is required on the bank confirmation response. Some of these items include account bank balances, fixed deposits, loan outstanding.
Thereafter, the bank confirmation response will return the items requested in the bank confirmation letter. The auditors will then take this bank confirmation response and countercheck the figures with the company’s internal records. After which the auditors will reconcile the differences between the amount as per the bank confirmation and the amount as per company.
In this project, we got the AI/ML to read details of the client, and the specific banking details to obtain from a data repository, such as Excel (xlxs or csv), or a database. Then, we use RPA tools to generate the bank confirmation request in a predetermined format and send the bank confirmation letters to the respective banks.
Step 2: Information retrieval of the bank confirmation response
After the banks respond to the bank confirmation request, information is retrieved from the bank confirmation response using Optical Character Recognition (OCP) and Natural Language Processing (NLP) to extract the relevant data fields returned. RPA tools will be utilised to prepare a spreadsheet template for the auditor to review the information.
Using IA, we can help audit firms to expedite their bank confirmation processes.
It sounds like RPA is a new ballgame compared with traditional accounting. How should companies take that first step to adopt RPA?
As with any new technological initiatives, there are setup costs to consider. Companies also need to hire staff with the expertise to handle and maintain RPA bots. Therefore, support from senior management is important. Typically, some of these projects can be implemented with RPA consulting firms who will prepare and run workshops and training for clients. They can advise on best practices, types of artificial intelligence/machine learning (AI/ML) to use. And they will work with users to derive the final RPA design, as well as prepare system design documentation and design the walkthrough with users.
What critical skills do professionals in the accounting field need in order to address these evolving business needs?
A good reference can be found in the Jobs Transformation Maps (JTM) for In-House Finance and Accounting (F&A) functions, and Accounting by Workforce Singapore (WSG). The maps are relevant to more than 100,000 professionals in the accounting and finance sectors working in Singapore.
To excel in today’s complex business and regulatory environment, professionals must do more than crunch numbers! In the JTMs, WSG identified emerging job roles such as specialist ethical hackers, citizen data scientists, and environmental, social and governance (ESG) specialists.
Technology skills that are increasingly in demand include the application of artificial intelligence, cloud computing, data analysis and interpretation, and robotics and automation. Also in demand are soft skills such as adaptability and creative thinking. Through WSG’s Accountancy Job Redesign Initiative, employers and workers can get support to create and take on higher value jobs.
The future looks bright for accounting and finance professionals in these sectors. Currently, the workforce includes 80,000 workers in in-house finance and accounting functions, and about 20,000 in accounting practices. And new roles and services are expected to grow, with a projected demand of 6,000 to 7,000 new accounting jobs by 2025.
About the AccTech Centre at SIT
Launched in 2019, AccTech Centre is a joint initiative between SIT and the Singapore Accountancy Commission. It serves as a resource centre to facilitate collaboration, technology, and business innovation in the accounting sector. Its mandate is to help small and medium practices (SMPs) in the audit industry to digitalise their business processes.
In trying to digitalise audit services, we look at three areas: robotic processing automation (RPA), data analytics (such as Power BI and Tableau), and the use of artificial intelligence technologies such as machine learning, natural language processing, or intelligent document processing.