Abstract｜Accounting at Your Fingertips
The Impact of Financial Robots on Enterprises
Management Accounting Practices
Author:Cheng Ming
Central Park (Photo: Yuan Guohui)
The rise of automation and artificial intelligence across various industries is an inevitable trend that will have a disruptive impact on human production and lifestyle. Financial robots are just one specific manifestation of this transformative process occurring in the financial sector.
For finance professionals, this transformation presents both opportunities and challenges. Only by adapting to this trend, thoroughly analyzing and assessing its impacts, and preparing adequately in advance can one seize the opportunities to realize maximum value during this transformation.
What is Robotic Process Automation
In today’s human life, every aspect is influenced by automation. For example, the autonomous driving modes of cars and airplanes, using robots to sell coffee, employing drones to deliver packages, and utilizing optical character recognition technology with ATMs to automatically sort cash. In short, automation is an application technology for machines and computers in the service and product production processes, requiring little or no human involvement.
With the invention of computers, many software systems have been developed to replace manual operations that were previously paper-based in business activities or to perform tasks that were never executed due to a lack of technical means, such as financial accounting, inventory management, and information exchange. The application of technology to replace manual operations is referred to as robotic process automation.
When determining the scope of automation processes, enterprises typically consider processes with the following characteristics: repetitive operations, lengthy processes, high-risk tasks, low output quality, and cumbersome steps requiring significant manpower.
However, not all processes can be automated. Processes that meet the following criteria are suitable for automation: clearly defined and rule-based process steps; clear process logic without the need for human judgment based on experience; processes that operate based on information systems; input information that can be recognized and processed by information systems after being transformed by application technology; and automation benefits that exceed costs.
Enterprises typically utilize the following technical means to achieve process automation and improve efficiency: customized software, running scripts, batch processing, software packaging, browser automation, desktop automation, and integration of databases with web services.
Today, automation has reached a relatively mature stage, leading to the development of new technical applications, among which robotic process automation is a rapidly evolving field that is transforming current business operating models. With the integration of artificial intelligence technologies, software robots can perform increasingly complex tasks.
With the integration of machine learning, natural language processing, natural language generation, and computer vision technologies, robotic process automation is also referred to as intelligent process automation. Robots used to handle various business tasks in the financial sector are known as financial robots.
At its current stage, robotic process automation is not just a tool for handling monotonous repetitive tasks but a transformative technology that can bring significant value to enterprises. It can completely eliminate human errors, enhance work quality, and maintain a complete operational log. Once configured, robots can execute the same task thousands of times with the same precision without errors and are compatible with various application system platforms.
Application of Robots in the Financial Sector
Currently, the application of robots in the financial sector mainly focuses on processes that are rule-based, highly repetitive, cumbersome, time-consuming, and involve large volumes of business. For example, expense audits, fund payments, invoice verification, bad debt write-offs, bank reconciliations, report generation, and tax filing. Among these, value-added tax invoice management is a typical application scenario. The entire process of managing value-added tax invoices is cumbersome and repetitive, with low added value, consuming a significant amount of operational time for finance personnel. After implementing financial robots, not only is a large amount of manpower saved, but work efficiency is also greatly improved, allowing finance personnel to complete a day’s workload in just three to four hours, while also avoiding human errors, thus significantly enhancing accuracy and quality.
Currently, large enterprises establish financial shared service centers to improve work efficiency and reduce costs, creating numerous scenarios for the application of financial robots. The primary prerequisite for implementing financial robots is to comply with the cost-effectiveness principle. One of the functions of the financial shared service center is to centralize basic financial management work based on an information platform, thus creating conditions for a large amount of work to be replaced by robots. Additionally, robots have the capability to work 7×24 hours, which enhances the rapid response capability of the financial shared service center.
The Impact of Financial Robots on Management Accounting Practices in Enterprises
Firstly, the replacement of basic financial work. The implementation of financial robots will undoubtedly replace some basic financial tasks that are rule-based, cumbersome, and time-consuming, such as cash handling, data verification, accounting entries, and report preparation.
Firstly, due to the 7×24 hour working capability of financial robots, and the speed of work depending on the data processing and response speed of the information platform, while also avoiding human errors, both work efficiency and quality will significantly exceed human levels.
Secondly, financial robot implementation projects have advantages over traditional information technology projects, such as lightweight, loose coupling, flexibility, and compatibility.
Finally, there are significant cost-saving benefits. The investment in financial robots is much lower than the traditional information system development costs, and besides direct labor costs such as salaries and benefits, other indirect labor costs such as training, recruitment, and career development can also be saved.
Secondly, the impact on the structure of finance personnel. As some financial work is replaced by financial robots, the responsibilities of related finance personnel will also be affected.
Financial robots execute business operations entirely based on pre-set rules and are not influenced by irrational human emotions such as conflicts of interest or favoritism. Therefore, as long as the operational rules are reasonably established, financial robots can effectively perform multiple roles.
Basic financial work can be partially or entirely completed by financial robots. Therefore, related personnel in these positions will face the possibility of being replaced.
The focus of financial auditing work will change. Financial robots can avoid human errors in financial accounting. Therefore, enterprises will no longer need a large number of accounting auditors to perform trial balances to verify whether there are errors in bookkeeping, which can further reduce the number of financial auditors.
With the launch of financial robots, the resources and focus of enterprise financial management will shift from basic tasks such as accounting to more emphasis on pre-preparation, in-process control, post-analysis, and assessment in management accounting functions. In the future, the importance of management accounting in enterprise financial management will further increase. Therefore, enterprises will increasingly need high-end composite talents in areas such as financial forecasting, investment decision-making, budget management, tax planning, financial control, and analysis.
Thirdly, the adjustment of financial control mechanisms. In the future application environment of financial robots, some traditional financial controls will become unnecessary. For example, because robots will execute business operations according to established rules, there will be no human errors or intentional mistakes, thus traditional financial review or audit controls may no longer be executed. Additionally, some control measures for the separation of duties may also be eliminated for the same reason.
Although some traditional financial controls can be eliminated, new financial control measures need to be implemented to address the risks associated with financial robots, covering the entire lifecycle of the robots.
Fourthly, the improvement of industry regulatory standards. In the future, financial robots will become an industry trend, and enterprises of a certain scale will apply financial robots to replace humans in completing part of the financial work, which will become a common phenomenon. Just as accounting personnel must possess certain qualifications to work, follow prescribed accounting systems or standards to execute business, and undergo continuing education to ensure knowledge updates, financial robots or the personnel responsible for configuring and implementing financial robots should also meet the same qualification requirements.
(Reprinted from “China Accounting News APP”)
Note:This article is a reprint and is intended for the exchange of financial knowledge. If the author disagrees with this public account’s reprinting of this article, please leave a message, and we will handle the deletion. Additionally, the viewpoints expressed in this article do not represent the views of this public account; readers are advised to be aware.
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