Robotic Process Automation Can Save 25,000 Hours of Avoidable Work

Finance departments can save their teams from 25,000 hours of avoidable rework caused by human errors by deploying robotic process automation (RPA) in their financial reporting processes, according to Gartner. Currently, fewer than one-third of finance departments that have deployed RPA have utilized the technology for financial reporting, leaving major efficiency gains on the table.

Gartner studied the use of RPA in finance departments through interviews with more than 150 corporate controllers, chief accounting officers (CAOs) and chief accounting leaders to determine the main benefits of implementing RPA within the financial reporting process and identified three key roadblocks that are currently hindering broader adoption.

Gartner’s analysis based on survey responses with accounting and controllership leaders revealed three roadblocks finance leaders experience when considering implementing RPA: a hesitancy to remove human judgment from the process, perception of low ROI and process standardization delays before implementation. RPA is best applied to manual, repetitive actions that a human would otherwise complete with a computer.

CAOs and corporate controllers have been hesitant to deploy RPA full-scale within the financial reporting process, relying on staff interaction points for steps deemed still beneficial from human judgment. However, this approach limits the upside of RPA’s benefits while still introducing human error and the need for rework.

Most CAOs and corporate controllers are forced to prioritize RPA activities based on a lack of resources and their role in managing a cost center, where they are consistently asked to do more with less. Using a typical, cost-centric ROI formula focused on full-time employee time savings tends to deprioritize RPA opportunities within financial reporting for other business opportunities.

Gartner research has found that the average amount of avoidable rework in accounting departments can take up to 30% of a full-time employee’s overall time. This equates to savings of 25,000 hours per year at a cost of $878,000 for an organization with 40 full-time accounting staff.

A final roadblock in full-scale RPA implementation for financial reporting is a belief by accounting leaders that the process must be standardized before it is implemented. Interviews with CAOs and controllers revealed a common belief that without standardized processes, the failure rate due to exceptions was much more likely. These potential failures within financial reporting processes were viewed as riskier compared with other automation opportunities due to the risk of financial misstatements or missed reporting deadlines.