There are several misconceptions about robotic process automation (RPA), how it works and why it’s important in the context of accounts payable (AP) automation.
We’re here to address those misconceptions, reveal the truth and outline how RPA can benefit your business and the market.
Robotic Process Automation Misconceptions
There’s a tendency to think about RPA through a narrow technological lens as a software tool for automating repetitive work processes. While that’s not entirely wrong, RPA is more than just a software tool.
RPA is an alternative digital workforce that delivers business value. This workforce should be assessed based on, for example, how many invoices it can process in one day and how much time and money that saves your business.
The other misconceptions about RPA center on the nature of the technology itself. It’s not a humanoid robot. You’re not going to see a physical RPA robot with arms and legs like you would in a manufacturing plant.
RPA consists of software programs that give instructions to electronic circuits to perform tasks. You’ll see RPA in action doing tasks on your computer screen such as keying in numbers into the amount field of a digital invoice.
Robotic Process Automation Truths
Having cleared up these misconceptions, let’s go deeper into the truths about RPA.
The technology uses software rules, instructions and programs to instruct automated software to perform routine, repetitive, high-volume tasks – you know, the time- and effort-intensive stuff that doesn’t impact the bottom line
“RPA takes away mainly physical tasks that don’t need knowledge, understanding, or insight — the tasks that can be done by codifying rules and instructing the computer or the software to act,” said Leslie Willcocks, a professor of technology, work and globalization, in a McKinsey report.
Steps in the RPA invoice process
Using rules and instructions, RPA can be used throughout the following invoice processing steps:
- RPA can monitors a company’s email accounts or shared folder files looking for invoices. The technology figures out the intent of the emails and identifies the ones that are invoices.
- RPA can reads and extract specific information from those invoices and then starts typing in, just like a human would, the digits such as 100 in the digital invoice amount field. That would indicate the amount of the invoice totals $100. In a similar way, the technology automatically types in information in other fields such as the invoice number (123) and vendor numbers (345).
- After data is automatically entered in the appropriate fields, the system prepares and sends email notifications (without human invo updating the appropriate approvers about the invoice status. Here’s an email example:
Dear accounting manager,
RPA administrator has completed the invoice retrieval and info extraction process for Invoice Number 1. Here is the attached invoice document. This bill has also been entered into your accounting system and is ready for your approval.
Department Engineer Automated Assistant
- RPA uses business rules to catch numerical mistakes. When that happens, the technology sends them to AP managers for manual review. During this step, RPA also cleanses, validates and confirms data.
- Once an account manager clicks “approve” for am invoice, RPA technology uploads PDF copies into the company’s accounting system.
- RPA tech publishes invoices on the company’s dashboard to keep AP managers updated.
Benefits of Roboctic Process Automation
As you can see from this process, RPA speeds up invoice processing and reduces time-consuming data entry and errors.
Wilcocks conducted 16 case studies and found companies utilizing RPA saw investment returns between 30 and 200 percent in their first year using the tool.
But it’s misleading, she said, to look at only the short-term financial gains especially based solely on labor savings.
“That approach does not do justice to the power of the software because there are multiple business benefits,” Wilcocks said. “There are benefits for employees, too. In every case we looked at, people welcomed the technology because they hated the tasks that the machines now do and it relieved them of the rising pressure of work.”
Not only does RPA handle tasks full-time employees despise, it handles them up to 20 times faster and for 10 percent of the cost of a full-time team member, according to multiple reports.
Differences between RPA and machine learning
The more you learn about RPA the more you’ll see the words “machine learning,” a major type of artificial intelligence. Both improve AP productivity, but it’s important to understand the differences between them.
In the simplest sense, RPA technology performs tasks, while machine learning thinks about them. RPA excels at following directions, while machine learning processes and analyzes information to help your business make sound decisions.
There are more differences: RPA processes structured, pre-defined data such as invoice amounts and invoice numbers in rows and columns. Machine learning, on the other hand, processes unstructured data such as emails about the status of invoices.
As it collects more data, machine learning gets better at predicting vendor behavior and the likelihood of future invoice and payment outcomes.
RPA and machine learning are on similar growth paths. According to Gartner, by the year 2022, 65 percent of organizations that use RPA will introduce machine learning technology. As for the RPA market itself, it’s expected to grow by 29 percent from 2017 to 2023, according to Market Research Future.
Final thoughts
So, there’s no doubt RPA is a growing market and will be increasingly utilized in AP workflows in the future.
Here’s an intriguing way to look at this:
“Over the long term, RPA means people will have more interesting work,” Willcocks said. “For 130 years we’ve been making jobs uninteresting and de-skilled. The evidence is that not whole jobs will be lost, but parts of jobs, and you can reassemble different types of jobs. It will be disruptive, but organizations should be able to reassemble into different types of jobs.”
While not every part of the AP workflow can be coded and handled by software, RPA is another step toward liberating finance pros from the mundane and allowing them to influence real, sustainable, strategic growth.