Transforming Accounts Receivable with Robotic Process Automation

Transforming Accounts Receivable with Robotic Process Automation

Client Overview

A multinational pharmaceutical manufacturing company specializing in high-quality pharmaceuticals sought to automate its accounts receivable processes to handle over 1000 invoices monthly.

Objectives

  • Streamline AR operations with Robotic Process Automation (RPA): Replace manual invoice processing with RPA, a technology that automates repetitive tasks. This will significantly increase efficiency by reducing processing time and minimizing human error. The streamlined workflow will free up valuable staff resources to focus on higher-value activities like credit risk analysis and customer relationship management.
  • Boost accuracy and minimize errors: Eliminate the possibility of human error inherent in manual data entry. RPA ensures error-free invoice processing by accurately capturing and validating data, leading to improved financial data integrity. Consistent and clean data is crucial for timely and accurate financial reporting.
  • Unlock real-time visibility and financial insights: Automate data extraction and populate financial systems with accurate invoice data in real-time. This enables enhanced visibility into AR performance metrics, such as outstanding balances and collection cycles. With real-time data, financial teams can make data-driven decisions to optimize cash flow and minimize bad debt.
automate its accounts receivable processes

Challenges

  • Bottlenecked AR workflow: Manual invoice processing, taking up to 10 days per month, created a significant bottleneck in the AR department. This slow processing time hampered efficiency and could lead to late payments and potential cash flow issues.
  • Vulnerability to human error: Relying on manual data entry carries a high risk of errors in invoice processing. These errors can range from incorrect data entry to misclassification of invoices, leading to inaccurate financial reporting and potential financial losses.
  • Limited scalability for growth: The existing manual process lacked the scalability required to handle the company’s high invoice volume (over 1,000 invoices monthly). As the company grows and invoice volume increases, the workload on the AR team would become unsustainable, hindering operational efficiency.

Solution

  • Phase 1: Designed and implemented a process automation solution using Microsoft Power Automate to streamline the invoice processing workflow. Power Automate extracted key data from invoices (e.g., invoice number, amount, due date) and routed them to the appropriate financial systems.
  • Phase 2 – Advanced Automation for Complex Processing: To further accelerate the processing time and handle the high volume of invoices (over 1,000 monthly), the company transitioned to custom Python scripts. These scripts offered greater flexibility and processing power to automate more complex tasks within the AR workflow.
Transforming Accounts Receivable with Robotic Process Automation

Benefits

  • Turbocharged Efficiency: The implementation of automation resulted in a staggering 7,000 times improvement in productivity. Invoice processing time dropped from 10 days to a mere 2 minutes. This dramatic reduction freed up valuable staff time for higher-value tasks like credit risk analysis and customer relationship management, leading to a more optimized AR department.
  • Flawless Accuracy: Replacing manual data entry with automation significantly minimized the risk of human error and ensured good data quality within the organization’s financial records and reports. With accurate and reliable data, the company can make data-driven financial decisions with greater confidence, improving overall financial health and responsible business practices.

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