THE USE OF ROBOTIC PROCESS AUTOMATION IN

ACCOUNTING

Hulya BOYDAS HAZAR ¹*

2
Can TOPLU
¹ Istanbul Aydın University, Department of Business Administration, [email protected] *Correspondent Author.

2 Seneca Polytechnic, School of Accounting and Financial Services, [email protected]

Article history:
Abstrac t
Submission 14 June 2023 Robotic Process Automation (RPA) is an automation technology that mimics human beings in
Revision 18 September 2023 fulfilling business processes. It is used as a virtual worker. It is found that repetitive tasks with a
Accepted 26 December 2023 substantial quantity of work are especially cost effective and efficient to automate. The purpose of
Available online 31 December 2023
this study is to provide theoretical background and a discussion of the role of robotic process
automation in accounting. It is important to have thorough account of RPA, which is a technological
Keywords:
Robotic Process Automation, breakthrough that leads entities to strategical competitiveness in the business world.
RPA,
Technology,
Accounting,
Business Processes.

DOI:
https://doi.org/10.32936/pssj.v7i3.481

1. Introduction Robotic Process Automation (RPA) is not intelligent software.

Robotic Process Automation (RPA) is a rule-based software Unlike artificial intelligence or machine learning systems, RPA

technology which automates routine business processes. Since cannot learn by its own. If there is a change in which a process is

RPA is software, it can only perform digital tasks. Its handled, that process has to be programmed again in RPA.

programmable part is called robots or bots. RPA is rule-based, However, RPA can interact with intelligent software at the user

which means that the expert’s knowledge and skills of related interface level to become an autonomous system. If one or more

business processes are converted to if/then rules, and then coded intelligent systems interact with RPA, it can handle process

into software. In this sense, RPA is designed to mimic human changes when new economic and environmental conditions

beings. Routine business processes mean repetitive and develop.

recognizable patterns of business processes. Therefore, rule-

based software, like RPA, is the answer to take care of mundane Various business activities such as production, finance and

and bulky, yet time consuming business processes (Plattfaut & accounting, sales, acquisitions, supply chain management,

Borghoff, 2022). customer service and human resources have repetitive tasks. The
predicted potential economic impact of RPA is $6.7 trillion by the

One does not need data to build Robotic Process Automation year 2025 (Doguc, 2020). Issuing invoices, recording

(RPA) since human expertise is encoded as a set of conditions. transactions, financial reporting, filling in various types of

For instance, the developer of machine learning software needs documents and forms online or offline, data verification or

actual data from individual cases. The lack of need for data validation or reconciliation, creating and updating databases are

enables RPA to be programmed easier and faster relative to examples of areas RPA is used in accounting. The ease of

develop some other systems. developing and its ability to work in synchronization with other
systems, like ERP, web, mainframe, cloud, Citrix or Java
applications, make RPA a sought software.

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The use of RPA in accounting processes has been rapidly the recording. However, if this task is left to robots, it
increasing. One third of global companies are using robots in will finish in a much shorter time with a high degree
accounting processes (Schatsky, Muraskin & Iyengar, 2016). 500 of accuracy.
senior decision makers were asked to answer several questions in 2. Financial reporting: Entities which use RPA improve
a recent survey. 77 percent of those who responded to the survey reporting processes by finishing reports faster and
said that they believed RPA increases productivity through the more accurately. Moreover, these entities have to
automation of repetitive tasks, and 56 percent of respondents said define their governance procedures clearly (Meiryani,
that they are planning to use RPA (Doguc, 2020). et al., 2023). In return, this will be helpful for
compliance auditing.
2. Implementation of Robotic Process 3. Payments: Routine payments which are made at the
end of a specific time period, like at the end of each
Automation (RPA)
week or month for account closures, and payments
It is possible to implement Robotic Process Automation (RPA) in
after every purchase can be coded for RPA. The
the entity following these steps:
process of finding unpaid invoices, validating
1. The redesign of business processes: RPA is achieved
purchases, and paying the amount from the entity’s
by coding the existing business processes. However,
bank account can be automated.
there may be business processes which are redundant
4. Inventory management: An entity should be aware of
or obsolete over time. Sometimes, employees start
inventory levels. RPA bots can do all the labor-
doing business tasks differently than the set policies.
intensive tasks to inform the critical inventory levels
Whatever the reason is, the business processes that
and shorten ordering times to reduce storage expenses
will be coded need to be checked again. Some
(Balamurugan, et al., 2022).
processes may need elimination or optimization. The
5. Bank reconciliations: RPA can link and analyze
existing and accepted policies are then simplified and
related transactions and find discrepancies in the bank
redesigned.
account. It is a common practice that RPA is linked to
2. Choosing the software: It is necessary to choose a
supervised machine learning for reconciliations rather
platform with automation capacity. The management
than only using RPA (Bellinga, et al. 2022).
of information coming from different sources need to
6. Receivables management: Accounts receivable
be attained.
management demand that shipment forms and related
3. Automate the redesigned business processes: The
customer orders be compared before invoices are
redesigned business processes are coded.
issued and payments are made (Balamurugan, et al.,
4. Facilitate the use of the new application: Employees
2022). RPA is efficient in updating customer
need to be trained to use the new RPA software.
databases. Validating and making payments can easily
be coded for RPA.
3. Robotic Process Automation (RPA) Models
7. Tax reporting: Filling the tax forms may be considered
in Accounting as a redundant and low-skilled accounting job. It may
Robotic Process Automation (RPA) is used in accounting be considered as a straightforward job, but it is time
frequently. The following are some areas that accounting uses consuming. One has to manually extract information
RPA: from the input Excel file to a CVS file (KPMG, 2019).
1. Recording transactions: There is a systematic If the entity employs RPA, the bots can collect the
approach to recording economic transactions of the required information and write to an output file which
entity. This activity involves well defined and has a different format.
predetermined steps (Lacurezeanu, Tiron-Tudor & 8. Monitoring and screening: Robots are used to monitor
Bresfelean, 2020). Therefore, it is a good candidate for applications and networks for surveillance reasons
rule-based technology. Recording transactions is a (Doğuç, 2021). It is easy for bots to screen the
repetitive task. The relevant accounts are found from transactions for auditing and compliance purposes.
a list of limited account names, and debit/credit entries
are made to these accounts. As it is seen, this process 4. Measuring the Robotic Process Automation
is repeated when a new entry is recorded. Usually,
(RPA) Success
entities have a high volume of transactions. It is time-
Generally accepted way to evaluate the success of any investment
consuming and overwhelming for the employees to do
is to find the return on investment (ROI) ratio. It is a measure of

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the investments profitably. It gives a rough estimate on how 3. Lower error rates: Errors and clerical mistakes are
profitable the Robotic Process Automation (RPA) project to the decreased if the entity uses RPA in its operations
entity is. (KPMG, 2018). Since the tasks are automated and
performed by a computer, making a faulty task
The formula of the ratio can be stated as follows: execution is reduced. When the computer undertakes
ROI = net gain/ total investment = (gain from investment – cost processes, it will do the same tasks in the same way
of investment)/ cost of investment no matter of its quantity.
4. Coping with high volumes: Robots can undertake high
“Gain from investment” component of ROI is the cost reduction volumes of work and perform the tasks the same way
achieved by automating business processes. Usually, it is a regardless of their difficulty and quantity.
monetary estimate of how much the entity gains from automation 5. Rule-based technology: RPA uses rule-based
instead of paying for employees to do the job. RPA projects need technology. It means that RPA uses pre-defined rules
a shorter time to be in place than any other automation; therefore, to perform business processes. It uses logical if-then
they provide quick returns (Doğuç, 2021). statements, where certain conditions must be fulfilled
before an action can take place. It is not a cumbersome
The qualitative benefits are important as well when considering process, and the outcome is always predictable.
the gain from RPA. The following is the list of examples one 6. Simplify business process: Before implementing
cannot measure in terms of money (Taulli, 2020): RPA, entities simplify their business processes by
• Accuracy redesigning them. They need this redesign to be able
• Customer Satisfaction to write the related computer code. However, this
• Agility simplification helps employees to understand the
• Employee Satisfaction processes better, write fault-free codes and do their

• Innovation tasks easily.

• Analytics 7. Ease of audit: RPA is a computer technology which

leaves behind a digital trail when it is used (Torlone,
et al., 2016). The same tasks are performed each time
5. Advantages and Disadvantages of Using
a business process is executed. The design of business
Robotic Process Automation (RPA)
processes is the focus of audit. Therefore, it is easier
The are advantages and disadvantages to using Robotic Process to audit the controls rather than individual
Automation (RPA) software in the entity. These advantages and transactions.
disadvantages are discussed in the sections below. 8. Easy to program: RPA executes rules-based business
processes. It is easier to write codes for preset rules
5.1. Advantages of using Robotic Process than writing codes for intelligent software (KPMG,

Automation (RPA) 2019). Programming of RPA can be learned with a

few weeks of training; hence no extensive
The advantages to use RPA software can be listed as follows:
programming experience is needed.
1. Cost reduction: RPA handles the redundant and bulky
9. Specialized personnel: Some tasks require specialized
processes which were previously accomplished by
and experienced personnel. If the entity has RPA to
employees. Entities which employ RPA can use the
perform the task, the computer will complete the task
software whenever necessary and need not pay wages
as if it is done by a specialized person. This will
or benefits for staff to do the job. This reduces the cost
eliminate the need to find specialized personnel every
of existing manual operations by 25% to 40% or more
time the need arises. The entity gains a pre-trained
(Lamberton, 2016). It is estimated that this automation
digital workforce with RPA.
would save $2 trillion in employee costs globally
10. No need for motivation: RPA does not need
(PwC, 2018).
motivational factors like bonuses, holidays, etc. to
2. Improve return on investment (ROI): Since there is a
successfully perform the duties like employees.
cutback of staff, the money, which would be paid to
11. Scalability: A process can be specifically defined in
them, will be left within the entity. The money which
RPA. Therefore, that process can be reused for other
would otherwise be paid to staff surpasses the cost of
entities upon need. If the entity undertakes more
implementing RPA. For that reason, the ROI ratio will
customers with the same business process, the
be higher if the entity employs RPA.

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 transaction volume rises. Related RPA can handle the automated using RPA alone. RPA has to be combined
increased workload (Balamurugan, et al., 2022). with an intelligent system like artificial systems,
12. Increased job satisfaction: Since RPA does the work robotics or machine learning.
for routine and redundant tasks, employees can focus 4. Forgetting about IT infrastructure: Since RPA is
on tasks which are more complex and cannot be done software, it runs in the computer system of the entity.
using RPA. Therefore, the IT infrastructure of the entity is vital.
13. Increase in usage: Beyond automating existing 5. Replacement of human beings with robots: There is a
processes, companies are using bots to implement new concern that the use of RPA will lead to the
processes that would otherwise be impractical. replacement of people. Therefore, the employees may
14. Improve service: Finding new customers is more be reluctant to employ RPA for their day-to-day tasks.
difficult than retaining current ones. Therefore, A survey indicated that lower-level employees did not
entities should develop strategies to improve the share the same view as the management that RPA
service given to old customers. A survey in 2016 brings work satisfaction (Cooper, et al., 2022).
stated that 52% of companies changed providers in the Research indicates that low-skilled workers tend to be
past year due to poor customer service where 73% of replaced by RPA, however, new occupations emerge
them wanted a service more suited to their needs and (Zhang, et al., 2023). The employment demand has
61% preferred that the repose time to their queries shifted towards accountants who have advanced
were faster (Doguc, 2020). RPA decreases the average digital skills (Ng, 2023).
time to respond to queries and finish business tasks by 6. Inability to adapt to uncertainty: RPA works with
76% (Diepeveen, Matcher & Lewkowicz, 2016). predetermined rules. It is not open to changes unless
Moreover, it is found that automation avoids customer the coding is altered or it is used with an intelligent
and employee conflicts, and that improves customer system.
satisfaction (Lacurezeanu, Tiron-Tudor & Bresfelean, 7. Possible errors: There is a high risk of possible errors
2020). and malfunctions if the business processes are not
designed according to the existing situations or RPA

5.2. Disadvantages to use Robotic Process is not coded well. A survey states that RPA raises
control and security concerns among professionals,
Automation (RPA)
including uncontrolled or unknown bots, fraudulent
As seen in the previous section, Robotic Process Automation
bot activities, and changing business processes which
(RPA) projects have many advantages. However, they are not
leads to bots providing bad data (Eulerich, et al.,
successfully completed all the time. 30 to 50% of initial RPA
2022).
projects fail (Lamberton, 2016). Moreover, these projects bear
8. Reduces the number of potential customers: Some
some risks (Bright, Michael & Hui, 2023).
customers want to interact with people. RPA is not for
those who would like to do business with people only.
There are some disadvantages of RPA which are listed below:
1. Data needs to be in digital form: RPA is a software
5. Conclusions
where it can only use digital data. If the entity’s data
Robotic Process Automation (RPA) is a technological
is not in the digital form, it can either not employ RPA
development where business processes are automated. It is a rule-
or the effort is greater.
based technology where redundant tasks with high volume
2. Redefine the business processes: Understanding the
transactions are accomplished. The main idea behind RPA is to
exiting business processes and redesigning them is a
execute business processes in a timely and accurate manner
managerial problem. However, some entities treat it as
without using employees. RPA can be considered as a virtual
if it is an IT problem and is left to IT employees to
worker.
solve.
3. Processes should have clear-cut rules: RPA uses rule-
The technological attributes of RPA make it an indispensable part
based technology. Detailed understanding of the
of accounting models. Recording transactions, financial
business processes is needed for automation. The
reporting, payments, inventory management, bank
knowledge of the process exceptions and how RPA
reconciliations, receivables management, tax reporting,
executes them have to be known beforehand (Vincent,
monitoring, and screening for audit purposes are accounting tasks
et al., 2020). Complex processes, where human
that can be easily automated with RPA.
judgment plays an important role, cannot be

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