When should you consider automating your accounting processes?

Accounting is an area that requires high precision and focus. It brings the greatest value by providing verified information that is the basis for making business decisions. At the same time, however, accounting teams are required to perform repetitive tasks that take up valuable time needed for analysis of results. In addition, there is a strong dependence on monthly or annual cycles, causing uneven distribution of duties.

Working in such conditions can cause overload and discouragement. It is then difficult to maintain a balanced mind and ensure concentration when it is most needed. Therefore, it is easy to make mistakes that can have significant consequences for the business.

Automation can come to the rescue. By relieving accounting teams of their least favorite activities, it will help restore motivation to act. On the other hand, it will provide business recipients with systematic and precise financial information. Of course, automation is not a cure-all. However, we have three main scenarios for which it is worth considering automation of accounting processes:

• the current accounting system does not provide functionalities specific to our process,
• we use several accounting systems and tools simultaneously and they are not integrated,
• we want to perform time-consuming activities more often, e.g. related to reporting.

In specific cases, automation can also support the processes of changing the accounting system or integrating accounting systems after a merger of companies.

In this article, I will describe several interesting cases of robotization in accounting and share a robotization map of one of the key accounting processes: the accounts payable management process (P2P).

Robotization of the accounts payable management process (P2P)

One of the key areas in accounting is the management of liabilities (Procure to Pay, P2P). The challenges in this process result from the need for cooperation between numerous stakeholders, both internal and external. Automation needs, on the other hand, are largely dependent on the current functionalities of the main accounting system

Collaboration with business and purchasing departments

Before a commitment is made, business departments define their needs, which they then have to formalize together with purchasing departments. There is a whole path to follow: from accepting the supplier and entering their data into the system, to issuing specific orders. Unfortunately, here, there are often gaps on the business side that require explanations and reminders about formal requirements.

Robots can support these processes, for example, by:

• entering and updating supplier data in the systems
• cyclical verification of the white paper
• registering and linking orders with external confirmations and invoices
• management of order reserves

Above all, however, they can support communication between individual departments by informing the appropriate persons about any tasks or gaps to be filled. In this way, they ensure the timely circulation of accounting documents.

Posting of purchase invoices

After receiving a purchase invoice, robots can register its receipt and (depending on the presence of OCR in the accounting system) read or verify the downloaded data.

However, the key competence of robots in this step of the P2P process is to verify the compliance of orders with invoices. Robots search for connections based on specific rules and verify the business consent to make the payment, and then book the given invoice. Robots can also relieve business departments of the substantive description of invoices, if only we find repeating patterns in these descriptions.

After making the payment, robots support accounting departments in the process of closing invoices. They register and read bank statements, and then search for connections between items from the statement and open items in the accounting system. In each of the cases described above – if the robot is able to find the connection based on the established rules, then it will completely automatically carry out the transaction and at the end of its work (in accordance with the established schedule) inform about its successes. However, in case of difficulties, he or she can prepare a list of documents that need to be verified manually.

Cooperation with suppliers

Handling obligations to numerous suppliers requires repeated analysis of documents on often diverse patterns. We can teach a robot to recognize specific cases and then process them fully automatically – from the moment an order is created to the settlement of payment.

Accounts Payable Process Automation Map

Our map of the automation of the liabilities management process will help you choose a scenario in this area. We developed it together with accounting experts and automation developers, combining business and technical knowledge in one place. You can download the map here:

Are the challenges listed in the list close to you? Or maybe you see other elements of this process that require improvements and robotic support?

If you see the potential for the development of automation in these processes, or would like to discuss the possibilities of robotization of other accounting processes, I encourage you to talk. Share your comment or write to me!

author: dr Klaudia Martinek-Jaguszewska

fragment of the series “Automation management guide for

beginners”

date of publication: 10.06.2024