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Author: Andres Aavik

A COVID vaccine for enterprise

Posted on by Andres Aavik

During the past two years the pandemic has changed the way we work, consume and socialize. Most of it has been forced to move online. For enterprise it is a “sink or swim” situation as they need to adapt quickly to changing customer behavior and consumer demands.

 Many industrial companies are now in a difficult situation because their sales have not kept pace with the times: according to the latest survey of industrial companies, for example, only 13 percent have their own e-shop, while a few have a self-service environment. Of course, industrial companies may think that an e-shop or a self-service solution is not necessary for their customer base. End customers are mediated by various resellers who are responsible for making goods available online. However, several studies have shown that COVID has not only influenced the purchasing preferences of end customers, in fact the same trend is followed by B2B customers. For them, too, it becomes increasingly important to choose a convenient self-service solution when choosing suppliers.

 A survey published by McKinsey in 2020 surveyed 3,600 B2B purchasers from 11 countries in Asia, Europe, North and South America. They revealed that COVID has already irreversibly changed company to company sales: in the future, the main and preferred way of purchasing will be digital self-service and the method of communication will be digital. This applies to both small and large enterprises, existing and new customers. As many as 80% of B2B subscribers surveyed were accustomed to the convenience and speed of self-service and digital communication during COVID and do not want to return to phone, e-mail and face to face meetings.

 A recent report by Grand View Research states that as early as 2019, the global B2B e-commerce market was worth $ 5.7 trillion. As a result of COVID, this market is projected to grow by as much as 17.5% per year until 2027. While in 2019, Asia and the Pacific led the world, accounting for 66.4% of the value of the sector, COVID will increase the share of B2B e-commerce in other regions, especially in the US and Europe.

 While the need for B2B self-service solutions has long been recognized in the larger Asian markets and the United States, in the context of rapid global web-based networking caused by COVID, the provision of such solutions is inevitably increasingly necessary in Europe as well. During the periods of restrictions, e-commerce has helped many local B2C companies to stay afloat, whose turnover from the HoReCa sector or other traditional channels has fallen dramatically. It is likely that in the near future, if we can imagine, the success of industrial companies will also be affected by how good and fast of a self-service experience they can provide to their B2B customers.

 Self-service is also becoming more and more of a necessity in the situation where people have 7 jobs at the same time: from cooking, cleaning, homeschooling and a kindergardening to their actual jobs. If the customer call comes at the exact moment when the sales representative is trying to clean up the mess his 3-year-old had made during lunch, it is simply not possible to accept the order at that moment. However, a well-functioning self-service environment accepts orders automatically and the sales representatives can spend their precious time doing tasks that provide higher added value both personally and for the Company.

Disclaimer: Flowit has a B2B SaaS self service solution offering – www.salesorder.eu

11 top RPA use cases in 2021

Posted on by Andres Aavik

Robotic Process Automation brings several benefits to organisations. Here are the top 11 processes RPA can execute for business.

Post summary:

  • What is robotic process automation?
  • Why do companies invest in RPA?
  • Eleven RPA use cases

What is robotic process automation?

Robotic process automation (RPA) is the use of specialised computer programs, known as software robots. These robots automate and standardise repeatable business processes that are typically carried out by employees.

The sector is huge, according to research from Forrester, the industry is expected to reach $2.9 billion by 2021.

Imagine a robot sitting at a desk using the same applications and performing the same tasks as a human employee would.

rpa-use-cases-robot

Robotic process automation is not physical robots. It is where a virtual robot mimics human activities by interacting with applications in the same way an employee would.

Except it does with the same speed as a computer system.

For example the most efficient software robot Flowit developed performed the tasks of approximately 1,100 human worker equivalents every single day.

Supporting as a virtual robotic assistant, these bots take on monotonous tasks, freeing up time for workers to engage on more revenue-generating tasks.

Furthermore, RPA integrates well with existing IT infrastructure, Even working across different platforms, applications and departments. Even legacy applications which are extremely costly to update.

Companies do not have to heavily invest in automating processes, yet those who do witness surmountable benefits.

Why do companies invest in RPA?

Robotic process automation is both cost-effective and user-friendly. Its advantages are drawing interest from organisations across several industries.

These benefits include:

  • Increased accuracy. Bots are incredibly accurate and consistent – they are much less prone to making mistakes or typos than a human worker. Virtual robots apply conventional processes like adding or removing user accounts. Including copying information from one system to another, onboarding employees or populating a form based on information from other systems.
  • No interruption of workflows. Virtual robots operate 24/7 without staff initiation or further interruption.
  • Meet regulatory compliance. Configured bots follow instructions and provide an audit trail for each step. Bots can also re-play their past steps in case a process needs reviewing. The controlled ‘robotic’ nature of their work makes them ideally suited to meet strict compliance standards.
  • Work within existing parameters. Traditional automation initiatives need extensive IT resources to integrate across multiple applications. Robots do not; they work across the layers of existing applications as a person would. This is particularly useful for legacy systems, where APIs are not available. Alternatively, in organisations that do not have the resources to develop deep level integration with existing legacy applications.
  • They improve employee morale and experience. Employees invest more time and their talents into more engaging and strategic work. Bots enable workers to offload manual tasks like filling out forms, data entry and searching for website information. Employees can focus on strategic, revenue-producing activities instead.
  • Increased productivity. Process cycle times are more efficient and completed faster compared to manual processes.

RPA technology has advanced significantly and is adding more value all the time.

Advanced cognitive capabilities like artificial intelligence and machine learning allow bots to interpret the interfaces they work across intelligently. Virtual bots are better able to handle errors and sift through unstructured data.

Machine learning allows bots to recognise patterns over time, meaning that when a process requires human intervention, a bot learns and acts autonomously when the situation arises again.

rpa-use-cases-machine-learning

Eleven RPA use cases for business

Sales Orders

Data consistency across enterprise-level platforms is a very tedious task. Sales representatives need to spend their time entering data into a CRM system plus an ERP system.

Finance analysts have to replicate that data and enter it in another system or module.

This results in duplication, produces errors and impacts productivity. RPA can automate such tasks and perform end-to-end sales activities like data entry and invoicing. Furthermore, bots can maintain a database by removing duplicate data.

By eradicating time-consuming tasks, employees focus on their primary tasks, generating more revenue.

Marketing: Lead Generation

Lead generation is an essential part of today’s marketing processes. Marketing teams create new entries for potential leads within a CRM system gathered from outside sources.

Some CRM platforms offer their own built-in data upload tools. Most legacy platforms need users to enter each new lead’s information by hand. Thus decreasing the time staff has for other tasks and increasing the chance for error.

Take, for example, a firm that attends industry conferences to gather potential leads. They would enter each prospective customer manually into their CRM system.

With RPA, users can program software to import the data from their spreadsheets. Being faster and with a higher level of accuracy than by hand. Once again, the staff can focus on engaging with lead prospects instead of data entry.

Invoice Processing

Invoice processing often contains repetitive manual tasks, resulting in delayed and inaccurate payments.

Timely payments can deliver quality goods and services from the vendor faster.

High volume invoice processing has many challenges. These include invoice formats, data from various sources, reconciliation procedures and entry into one database.

RPA automates invoice processing – formatting the data input, reconciliation errors, and even process precise decision-making, minimising human intervention.

RPA automates the end-to-end process from receipt to payment.

Processing Refunds Faster

A company’s reputation depends on how fast it can remedy its errors, and refunds are one example. Customers demand this process to be seamless, fast and pain-free; however, this is easier said than done.

Complaints and return requests generate much data that can be tiresome to sort through. RPA deals with the matter and processes the refund without delay. Improving customer satisfaction and having a positive impact on a brands reputation.

Payroll

Processing payroll every month is a time-consuming, repetitive task for the HR team in every organisation.

Payroll involves a significant volume of data entry. Often resulting in data inaccuracy causing delays in payment and employee dissatisfaction.

RPA verifies employee data consistency across multiple systems, validating timesheets, load earnings and tax deductions. Virtual robots can automate salary slips, administer taxable benefits and other reimbursements.

RPA automates payroll-related transactions from end-to-end to avoid inaccuracies and delays.

Financial Reports & Accounting

At the month’s end, or after each quarterly period, is a stressful time for those working in finance and accounting, who are frantically compiling various sources of information for companies.

RPA can analyse past historical and current market trends to make forecasting assessments of the company’s financial health, providing variance reports. Furthermore, RPA can download monthly sales data and calculate sales commissions owed, make payments and record all financial data.

RPA automates the aggregating of financial data in a fraction of the time, leaving accountants to leverage that information for insights and forecasting.

Customer Service

Fast responses are what today’s customers expect, with a solution following quickly behind. RPA makes it possible to deliver top customer satisfaction and what customers want.

Automated customer care systems can filter queries and offer initial responses to customers. RPA categorises queries and sends them to the right department, such as the tech department, service department or sales.

Sorting ensures that the right customer care agent is selected for a quick resolution. There is no need to transfer a customer’s call from one customer service agent to another.

Customer service contains several rules-based processes that could be streamlined. According to recent research, 70% to 80% of rules-based processes could be automated, and it is a good idea to begin with customer service.

Storing Data

Looking at RPA use cases, it can store, sort, organise and make accessible all kinds of business information very easily. Systems can categorise different data ranging from contact information, purchase history, preferences, HR information like birthdays or contracts.

When data is sensitive, then there is a need to automatically obfuscate data due to data privacy concerns. The data does not need to be hidden but merely anonymised.

This data can then be either locked or displayed according to the privileges of various job roles.

So customer care agents, salespeople, HR and senior management can equally access but not share sensitive or obfuscate data. There is no need to enter this information or worry about its accuracy or sensitivity.

Storing information is one of the most labour-intensive jobs and can cause much stress. RPA use cases have reduced repetitive tasks by up to 80%.

Price Comparison

Businesses have to make purchases in bulk to manufacture products or provide services.

The cost of these items impacts a company’s revenue or profits. Company staff always research online to make an informed and hopefully cost-cutting decision.

Researching is time-consuming and complicated, which is why we can see it as different RPA use cases in many companies. Virtual bots compare prices from different vendors by their quality and product attributes. Businesses then buy the best products at the most competitive.

Recruitment

RPA can also help with recruitment, streamlining the process. It can source resumes from various platforms, access their value, wade through spam or unwanted applications.

RPA streamlines recruitment by a considerable margin. Reducing the stress of recruiters and allowing them to thoroughly assess every applicant.

Virtual robots could administer 90% to 95% of vital recruitment processes like screening, assessing, measuring and onboarding.

IT: Adding New Users

IT departments spend more time setting up user accounts for new employees and application-specific profiles for current employees.

This kind of work ties up highly skilled workers doing low-value, repetitive tasks. Also, some systems do not include the functionality to run back-end automation scripts.

For example, an IT department may already have an automated system in place for new user account provisions.

In essence, a user submits a request for an account on a particular system. Once the system administrator approves the request, the account is created. For the process to continue, an automated email is sent to the administrator to confirm user permissions. Finally, IT can configure user security permissions.

To speed up the process, a virtual bot can perform the administrator’s actions during the configuration step. The only manual work IT has to do is to approve the request.

Processing HR Information

Storing and processing HR information is challenging. It takes a lot of time and can be a tedious process.

A successful business generates vast amounts of employee data, that is challenging to filter and organise. RPA can collect and organise all the information an HR department requires.

Employee history, payroll, reimbursements and training levels, can be sorted through using RPA. It can handle all the day-to-day tasks and allow HR employees to focus on human-to-human interaction.

HR personnel can prioritise improving employee productivity, workplace culture, and finding new talent.

Extract Data in Different Formats

Data appears in varying formats, ranging from editable, scanned text to handwritten notes. Data entry workers grapple with reading the information and inserting it into the system.

RPA can use Optical Character Recognition (OCR) technology to read various information formats. Once scanned and processed, can enter it into databases.

Employees spend around 10% to 20% staff-hours on recitative computer tasks. Saving all that time and directing it towards something more productive.

Automating this process accurately stores information, returning a significant investment for an organisation.

Conclusion

RPA use cases can be seen in a wide range of ways to save both time and money, at the same time increasing job satisfaction.

At Flowit, we encourage businesses to adopt Robotic Process Automation. We recommend implementing system-wide automation from the entire outset.

Alternatively, start small and automate one process at a time to determine if it is the right choice for an organisation.

Companies Need To Adopt Innovative Solutions Or Die

Posted on by Andres Aavik

The COVID-19 crisis created a deep gap between companies that could continue working remotely and those that had to suspend their businesses temporarily. The deepening economic crisis is accelerating the demise of companies that are slow to adopt innovative solutions, while the efficient and digitalised companies are emerging from the crisis more reliable than before.

Andres Aavik, CEO and Board Member of Flowit
Andres Aavik, CEO and Board Member of Flowit

The two months of social distancing made the idling e-Tiger (Tiger Leap) jump faster again. Distance work and learning platforms, as well as video conferencing applications, gained tens of thousands of new users. Other services crucial to business livelihood were digitised at an accelerated pace. For example, you no longer have to go to a physical bank to use most banking services or go to a notary when buying real estate. Meanwhile, decreased sales numbers immediately motivated hundreds of Estonian merchants to open online stores. However, many of those that weren’t able to adopt such innovative solutions fast enough had to close their businesses.

During the crisis, the Estonian Health Board got criticised on how they collected data about the virus manually, using multiple different databases. Unfortunately, the situation in many private companies is in the same miserable state. Throughout Estonian industrial companies, the level of automation is almost nonexistent. At nearly all manufacturers, as well as at most service providers and government agencies, a significant portion of work done manually, could be automated.

Will the companies that haven’t adopted innovative solutions to speed up their work, who now had to lay-off a third of their workers, even survive?

The key to survival lies in the adoption of innovative solutions. Before the pandemic, people in meetings often said that it was not the right time to invest in innovative solutions because there was too much work to be done. By today, the situation has changed dramatically. However, there are changes we can still make that will help us survive the crisis and emerge stronger.

Companies that rely on state support will probably survive until autumn without having to change anything. Giving them enough time to start using innovative solutions in the company.

It is necessary to adapt to the new ways of working, but also lower turnovers due to the economic downturn as well as new consumer habits.

As people start running back to physical shops and restaurants, they will no longer mass-order goods online. Due to that, only those online stores will survive who offer their customers at least the same quality shopping experience as in a regular store. While it is not possible to touch the products in an online store, customers must be offered some benefits in terms of convenience, speed, and user-friendliness. And this should be provided to the person by a computer.

Meanwhile, manufacturing and service companies must be prepared to serve customers in a smaller team, faster and more efficiently, and perhaps at a lower price.

The companies that will emerge from the crisis stronger are the ones that adapt to new realities quickly and can bring to market new services even at these difficult times.

Today is a great time to review your current work processes, business model, and ask these four crucial strategic questions:

  1. Are we working as efficiently as possible?
  2. Do we already use all available digital solutions that save us time and money?
  3. Can some of our processes be automated?
  4. What new products and services can we bring to the market?

Companies that have been engaged in digitalisation and automation for a while already have a competitive advantage. Still, until the economy turns to new growth, it is possible to catch up with those companies. This is the last chance to change existing work processes and be among the companies that can benefit from the crisis.

The fear of automation being expensive has no merit. It might have been true 10-15 years ago, but since then, much has changed.

Approximately 60 per cent of the work done today can be done by robots, which are significantly more efficient than people. Meanwhile, you can achieve further savings through the use of web-based software services, off-the-shelf software, or custom-made digital solutions.

Once your employees stop spending time on the same repetitive actions, they can engage in tasks that require creativity and intelligence, such as product development and finding new customers.

Companies that don’t adopt innovative solutions will not improve even after the pandemic has ended. After the health crisis, we must also survive the economic crisis. That’s where exclusion won’t help any longer—instead, only the more efficient, effective, and automated solutions do.

Why RPA projects fail and how to learn from mistakes

Posted on by Andres Aavik

Companies adopting robotic process automation seek improved efficiency and productivity. However, if RPA projects fail it means businesses are missing out.

Post summary:

  • Why use Robotic Process Automation?
  • Why do so many RPA projects fail?
  • Learning from RPA failures
  • How RPA transforms the industry

Robots are part of heavy industry, that is nothing new. However, its virtual colleague, robotic process automation (RPA), is only getting started within the industry.

The technology’s intelligent software robots fulfil monotonous and time-consuming tasks, offering an abundance of benefits from improved accuracy to cost-saving efficiency and profitability.

Nevertheless, despite their apparent advantages, companies commonly face RPA failure. A habitual occurrence is that companies are not aware of the challenges surrounding robotic process automation. According to a Forbes article, 54% of technological failures are due to poor management, whereas technical problems cause only 3% of failures.

Why use robotic process automation to transform an industry?

Companies use robotisation to eliminate error possibilities during task performance. RPA follows defined rules, meaning it will not fail them unlike a human, who may miss minor things that impact the entire process.

Moreover, robotisation reduces cost. What does the company receive when investing in the development of a high-quality virtual robot? Well, robots are not human and do not seek financial or career rewards for completing tasks.

Plus, RPA is faster in its implementation since it refers to the low-code approach to development. Meaning ready-made modules are utilised to create solutions. Minimal amounts of code are manually written, whilst most of the tedious tasks become automated.

So, RPA implementation has a shorter term of return on investment as it does not require a company restructuring itself.

Why then, do so many RPA projects fail?

Globally around 30 to 50 per cent of initial RPA projects fail – an astonishingly high rate. Yet, with technology companies claiming they transform business operations and outlining the clear advantages – why do so many RPA projects fail?

RPA projects fail because companies and those who propagate the technology misunderstand how to use the technology.

Typical mistakes that lead to RPA project failures include misjudging the groundwork needed before the process begins. Business leaders want a faster, better and often cheaper approach to RPA.

This approach instructs IT to hurry projects, with IT ending up prioritising the fixing of rushed work. Inefficiencies begin to creep into the project, making the entire pilot project go over budget.

The last error is particularly concerning.

Pilot projects are often realised, yet nobody within organisations appears to have the mindset to take ownership, leading to a partial interest in the project, thus not fulfilling its optimal potential.

RPA is commonly viewed as a pure technology solution delivered by the IT department, and yet ultimately, it is a business solution. It is the business department that should lead an RPA project, not in-house IT teams.

Learning from RPA failures

The welcome news is that most RPA failures are the result of human mistakes, rather than the actual technology itself. The critical lesson here is that companies can learn from their past mistakes and altogether adopt a different approach.

Businesses should devise a roadmap of the entire RPA adoption process. This ensures that everyone involved fully understands their role.

Companies should check that all internal and external stakeholders are consulted, so assumptions about the end results are eradicated.

This is especially important in projects where there is no outside implementation partner. Organisational alignment is critical because it is the organisation alone that is held accountable.

All teams and leadership must be fully on-board. Top-level management must review each progress stage, ensuring that local teams are devoting significant time to automating processes. Everyone should be convinced of its use in advance.

From our experience, we recommend seeking guidance from the following departments:

IT teams should be consulted before building an RPA solution roadmap. IT will act as a coordinator between teams, both internal and external if appropriate. IT will also know whether future integration problems with existing systems will arise. If there is already an RPA implementation within the company, IT should bring both concepts together, learning from previous RPA adoption.

Data and analytics are on most management agendas, and bots have the potential to generate significant amounts of data. If analytics is involved from the outset, then essential decisions are considered based on the valuable data produced by the bots, rather than diagnostic information obtained by most bot installations.

HR is crucial to get aligned with, or RPA training programmes may never take place in the corporate training schedule. RPA training is vital to reduce reliance on RPA consultants and empowers employees.

External RPA specialists like us already run numerous processes for large companies. It is only logical that businesses consult with companies like ours as we have accumulated significant expertise in RPA.

The majority of companies do not have their own RPA solutions, so they ask us to develop the technology for them. Either with our turn-key solutions or providing expertise if the client wishes to develop the RPA in-house.

Businesses like Flowit understand RPA processes and provide a hassle-free model for outsourcing RPA implementation. Ideal for companies that do not wish to deal with the complexities of automation. And companies that expect a higher than 90% success rate.

How RPA has transformed the industry

RPA projects that succeeded teach us the same lessons as those that fail. There is a lot to learn from businesses that are thriving as a result of implementing the technology.

By reducing cost, eliminating human error and lessening repetitive tasks, RPA is transforming the industry because it ultimately frees up resources for company employees.

Still, businesses have to apply the right techniques of implementation to guarantee against failure. Otherwise, companies will waste their investment in potential technology.

To implement RPA correctly, companies should be aware of the failures that have occurred from implementing robotic process automation. This will minimise the likelihood it will happen before the project has even been realised.

How to Automate Your Accounting? Part 3: RPA and The Future of Automation

Posted on by Andres Aavik

This article was initially published by our client, Robby & Bobby, for whom we have built various accounting automation solutions.

Given how much accounting has changed over the last 30 years, we probably cannot even imagine what the next 30 years have in store for us. Some trends are predictable, such as accounting becoming more automated in the future, or programs being able to figure out which invoice belongs to which account. But there are solutions that are quite affordable and can already be implemented today – one of them is robotic process automation, or RPA. 

What is robotic process automation aka RPA?

RPA (robotic process automation) means entrusting repetitive and time-consuming activities to a robot so that your employees can dedicate more time to value-adding activities. Routine and time-consuming activities include for example data entry, verification, comparison, and amendment, or gathering information from various systems. Accountants still do many of these kinds of task.

RPA is very useful if you need to use several programs that cannot be connected via an API. RPA is also useful when one of the programs is an email software, Messenger or some old-fashioned program that you do not yet want to replace.

A few years ago, I saw a video where an RPA checked the documents submitted by a new employee, asked for missing documents via e-mail, sent a confirmation to the employee via e-mail that everything was correct, then registered the person in various registers, and ordered a work computer for the employee. Wow!

Basically, RPA is an extension of the Excel macro, except that while macro only works within Excel, RPA can work between different programs – take something from here, paste it there when it is done, upload the file to Drive and send the link via email. Sounds unbelievable? Or rather genius?

It is important to understand that RPA is a “macro” that works based on algorithms, not an AI application or artificial intelligence. RPA is exactly as smart or dumb as the software created by its developer. No IT person can develop a functional accounting RPA alone because an RPA that is actually useful requires input and control by an accountant who understands the processes. This is why there are only a handful of these applications used in accounting.

The operating principle of RPA differs significantly from traditional system integrations. Namely, RPA is capable of combining a wide variety of programs and can be called the greatest advancement in automation. In the long run, RPA will result in lower labour costs, faster processes, increased precision and simpler workflows. On the micro-level, robots are able to perform activities that traditional solutions can never do.

Benefits of RPA for accounting automation:

  • Fewer errors – automation reduces man-made mistakes and helps limit costs.
  • Increased efficiency – robots are faster and more efficient at performing routine tasks. This gives employees more time to do meaningful work.
  • Lower costs – if necessary, robots can work 24/7 without taking coffee breaks, getting sick, or demanding a pay raise.
  • Job satisfaction – reducing the unpleasant routine part of a person’s daily life makes them happier. It increases employees’ job satisfaction and creativity.
  • An abundance of options – the use of RPA in accounting is not limited to one particular process, it can be applied to many processes simultaneously – obligations, claims, closures, controller work, financial planning and financial analysis, cost management, and even taxes.
  • Low requirements to readjustment of existing programs – implementing RPA does not require major reorganisation, RPA is both a bridge and a roof, existing above the current programs and reducing the need to make changes to existing programs.
  • No adjustment time – unlike an employee, the robot does not require a long adjustment time; you can install an RPA in less than a week. You just need to carefully analyse where to apply it in accounting to really benefit from it.

For what activities can RPA be used for in accounting?

The following is by no means an exhaustive list, but here are a few examples of uses for RPA:

  • insurance of data consistency and quality control, checking data consistency across programs and identifying errors
  • balance sheet maintenance – comparing balances with analytics, the analytics may also be contained in different program modules, handwritten Excel tables or another program
  • other checks related to closing a month
  • transferring data from one program to another if an API connection is not possible – it is often the case that one of the programs is very restricted or out-dated but the process itself can be clearly described
  • importing supplier data into the program – automatically filling in credit score, tax information and other important information
  • importing customer data and periodically updating key data
  • data comparison between two programs or different modules of one program
  • comparing the final balance of the bank statement and debit/credit turnover with the data in the accounting software
  • retrieving a report from the software, analysing it and forwarding it via email/uploading to a cloud
  • sending various reminders
  • adding cost breakdown data to invoices according to a provided table
  • generating invoices based on received data and sending out invoices
  • price comparison between different suppliers
  • market analysis
  • conducting background checks of customers and suppliers
  • checking the compliance of invoices with contract terms

Possible issues with using RPA

RPA often depends on the visual solutions of programs – if the location of a button is changed in a program or website, the corresponding change must also be made in the RPA. Also, RPA needs regular maintenance, you cannot just develop it once and expect it to work for the next 5 years.

If an API connection can be used between programs, you should definitely choose it. If it is possible to use a special program (for example, to manage purchase invoices or receipts, forward e-mails, etc.), this should also be preferred. But if there is no other option, RPA can be a very useful and enormously timesaving solution. 

The future of automation

As we already said, we probably cannot imagine what the next 30 years have in store for us in accounting. However, there are some trends that can be anticipated in addition to robotic process automation.

Reports. One definite future solution is smart apps that collect data from various sources and combine them into analyses and information you require. However, creating a smart app requires the involvement of at least one knowledgeable accountant-controller in the development team who can understand in detail where the data are retrieved from and how these data are combined into reports. As a result, there are still only a very small number of these kinds of solution and IT developers cannot handle them alone.

Real-time accounting In the future, all financial transactions will be recorded immediately and automatically, and you can view the analytics the next morning. In some areas of work, we may have almost achieved it, but there is still room for improvement.

Learning programs. The ability to learn will definitely be incorporated into programs. For example, when a new e-invoice arrives, the program is able to read what is on the invoice (for example, a mobile phone) and suggest that the relevant account is 5340 Telephone Expenses.

 

You can also read previous posts from this series:

How to automate your accounting? Part 1: Sales transactions       

How to automate your accounting? Part 2: Purchase invoices and receipts

How to Automate Your Accounting? Part 1: Sales Transactions

Posted on by Andres Aavik

This article was initially published by our client, Robby & Bobby, for whom we have built various accounting automation solutions.

Accounting has undergone tremendous changes in the last 30 years. Accounting done on paper has practically disappeared. Much like taking physical payment order forms to a bank. Thanks to software that is able to read purchase invoices and is compatible with banks, accounting has become significantly more automated and time spent on accounting has notably decreased. Let us take a closer look at how to automate your accounting, more specifically your sales transactions.

The first step in accounting automation: cast paper aside. Giving up paper saves a great deal of time, as well as money previously spent on paper, paper folders, and storage space. Storing electronic invoices has also been completely accepted by the tax authorities for several years.

Issuing single service invoices

Service invoices can be very conveniently issued directly from an accounting software program. Beautifully designed invoices have mostly fallen into disuse anyway and only data are exchanged. Thus, a brief sales invoice issued by an accounting software program that contains all the necessary data is generally well suited.

Some programs let you define articles, such as Consulting Services Estonia and immediately associate the correct income account of the income statement and VAT rate with it. This greatly reduces the work of the accountant in checking the invoices issued.

Benefits of invoicing directly from an accounting program:

  • convenience – an invoice can be prepared and issued from one place
  • the timely receipt of the invoices can also be monitored from there
  • an easy option for sending reminders (if needed)

PS! Good practice dictates that monthly sales invoices should be issued at the end of each month, not the beginning of the next month. This allows both the seller and the buyer to close their month faster.

Issuing recurring service invoices

Several programs allow you to save templates and issue recurring invoices automatically based on a predefined schedule. This is very convenient, for example for membership fees, fixed monthly payments, etc. If your company uses recurring invoices, select a program which enables it and gets this job done – it will save you a lot of time in the future.

Issuing e-invoices

An e-invoice is not a PDF but a machine-readable invoice. The information on it is easily readable and there is no need to digitise or manually enter anything. If the recipient of the invoice is able to receive e-invoices (this can be checked in the e-Business Register), you should definitely issue invoices as e-invoices. Sales invoices to the public sector can only be issued as e-invoices as from 01/07/2019, so we are finally reaching a point where e-invoices are becoming more widespread.

You should ask the developer of the program about the capability to issue e-invoices. Although some programs let you issue e-invoices without entering into an additional agreement (e.g. Merit upon agreement with Omniva; e-Financials), most of the time you have to conclude a contract with an operator such as Omniva, Fitek, Telema or e-Financials to issue e-invoices.

Recognition of sales in an online store

Sales made in an online store should be sent to an accounting software program through an API. Find an accounting software program that is compatible with the respective online store. The benefits of using an API include significant time savings and error prevention and it can also be used to forward detailed sales information to the accounting software, process this information, and conduct the necessary analyses.

What is an API?

To facilitate information exchange between the two programs, they both need to have the necessary gateway (API) for open communication and the other program needs to be given an API key to open the gateway. Both of the programs grant the other one permission for data exchange through the key. Settings determine how much data can be exchanged.

Data exchange is organised by a special little program (interface). Sometimes this interface is built into one of the programs, sometimes it is provided by a third party and sometimes you have to order it yourself. Creating an API is usually not a very large-scale and expensive job, but, as always, its profitability should be evaluated.

Forwarding sales transactions from a self-developed platform

The method is the same, data should be forwarded via API. As you have developed the sales platform yourself, you have more opportunities to choose the level of detail of the data being forwarded and you have more control over these data.

Alternative to API?

If you do not have an API, you can also transfer data from one program to another in a file form – you export it from the sales software, process it if necessary and import into the accounting software.

Note! If sales (and stock records) are conducted in another program, it is very important:

  • to apply strict deadlines and close the forwarded period in the sales software. Once sales data from May have been sent/imported, May is closed and can no longer be edited. All necessary corrections must be made the next month. Otherwise, differences with the accounting software will arise and it will take a lot of time and effort to find and correct these differences.
  • In addition to establishing and implementing rules, it is essential to regularly compare the data. Both people and software programs sometimes make mistakes and new data can even creep into a closed period through the keyhole. Ensuring data consistency between the two programs is a very important job. This requires the accountant to work accurately and be able to use programs correctly.

 

If you have not begun automating your business yet, start by mapping out how different transaction information is currently being recorded.

Sketch out the sales, purchases and bank transactions and think of the following:

  • how could the data flow?
  • what programs could be used?
  • what connections do you require?

If you are having trouble choosing the right accounting software or have any other questions about sales transactions automation, please contact us.

How to Automate Your Accounting? Part 2: Purchase Invoices And Receipts

Posted on by Andres Aavik

This article was initially published by our client, Robby & Bobby, for whom we have built various accounting automation solutions.

In the second part of how to automate your accounting, we focus on making the exchange of purchase invoices and receipts automatic. Let us now have a look at whether you can give up receipts and how to simplify the process of entering purchase invoices and receipts into the accounting software. 

We will view receipts and purchase invoices separately

A receipt is a confirmation of a purchase made from a store, an original document, which is mostly in paper form. Here are a few examples – I bought a box of sweets from the store for my business partner, refuelled the car, took a taxi, etc. A receipt may be paid by cash or card, using the employee’s own money or a company card.

Are receipts unavoidable or can we make do without them?

Dealing with receipts is annoying, as storing all the paperwork, collecting it and submitting to the accountant in a timely manner can be a real challenge even for the most punctual person. In addition to the fact that receipts tend to get lost, they are not everlasting, as information on them fades. It should also be borne in mind that receipts always mean extra work for the accountant because they have to be entered manually.

To reduce the number of receipts on paper, collect all the receipts from the last few months and analyse what purchases they are associated with. If possible, find a way to avoid receipts, for example:

  • instead of taking a regular taxi, enter into a business customer agreement with Bolt
  • enter into an agreement with a large chain of gas stations to receive a monthly invoice instead of making random purchases
  • favour purchasing goods from places where you can pay by invoice (in case you had not heard, even Selver is able to issue regular invoices to be paid afterwards to companies).

Use a handy app for receipts you cannot avoid. Expensify is popular in the English-speaking world, while in Estonia CostPocket (former tsekk.ee) is used.

This is how things work in CostPocket. The purchaser takes a picture of the receipt by phone using a special application and adds a note whether it was paid using a company card or is to be reimbursed to an employee and presses the button. That is it! The employee may throw away the receipt and the information on the receipt will be entered into an accounting program electronically.

CostPocket can be connected to the most common program (Merit, Directo, Standard Books, etc.) Check out the longer list here: https://costpocket.com/et/kuidas

There are three different options for processing purchase invoices automatically:

  • a digitisation service provider – software for both digitisation and purchase invoice management
  • a digitisation service provider – digitisation only
  • digitisation capabilities of the accounting software itself.

There are at least four digitisation service providers in Estonia – Omniva, Fitek, Telema (eFlow) and Envoice. Telema also has the capability to manage invoices (EDI solution), while others handle service invoices.

PS! If your business is a little larger, your invoices require approval from multiple people, and you have a precise cost allocation logic and multiple cost items, using an invoice management software program is definitely a good idea.

The logic of invoice management software:

  • The seller sends a purchase invoice to an invoice management program either directly as an e-invoice or via email through a digitisation centre.
  • The invoice management program marks the correct expense accounts and expense items for the purchase invoice, and an approval round can be used if desired. The invoice management software also serves as an archive for purchase invoices. In addition, you can send receipts to the invoice management program along with cost statements to have everything conveniently in one place.
  • After making the entry and confirming it, information about the purchase invoice is sent to the accounting software program.

Approval round for purchase invoices

Approval round for purchase invoices means that an invoice can be approved by several people. In large companies, the use of an approval round can help speed up the invoicing flow significantly. It requires a considerable amount of time to carry around paper invoices with their approval folders or seek approval via email. In addition, the approval round may be quite big in large companies. First, the accountant adds the expense account and sends the invoice to the agreed approval round. Then the employee who made the purchase confirms the correctness of the invoice (adds cost breakdown information and comments, if necessary). Following this, the board member or the CFO will approve the payment of the invoice. Finally, the accountant reviews the data once more and forwards the invoice to the accounting software.

In smaller companies, the use of an approval round is primarily important for cost accounting. An invoice management system allows a company employee to correctly classify expenses. The employee who ordered the work knows exactly which project the purchase invoice relates to, unlike the accountant. Of course, information can also be forwarded via email, but this is far more error-prone and time-consuming.

  1. In a smaller company, only digitisation should be used, unless separate approval and addition of cost items is required. There is no point in making your life more complicated than it has to be.
  2. You can also use the accounting software’s own digitising capabilities – you send an invoice to the email address, it arrives in the accounting program, it is digitised (only by the program, the accountant checks and corrects it), and you use the invoice archiving function in the accounting program.

Disadvantages of this option:

  • greater reliance on the accounting software – invoices are stored in the program and downloading them separately is bothersome (although Merit now has the option of downloading invoices from a certain period together in a zip file).
  • currently, using only OCR (Optical Character Recognition) digitisation still provides poor quality (in digitisation service providers, a human reviews the files and makes corrections).

In addition, the company may not appreciate several employees having detailed information on the company’s finances. And accountants will definitely not like it if people without any accounting skills fiddle around in the program or accidentally corrupt something.

Possible issues when using an invoice management program

As with any program, errors can occur when using an invoice management program. Here are a few examples:

  • a purchase invoice never reaches the invoice management program (sometimes an invoice can slip through the cracks on the Internet and never make it)
  • the quality of the digitisation software is poor
  • invoices move slowly through the digitisation centre (especially at the beginning of the month)
  • cooperation between programs may fail (for example if the information is retrieved from a warehouse management program, data conformity must be checked from time to time).

Automation of bank transactions

If there is a small number of bank transactions and the transactions are not standard, they can also be entered into the accounting software manually. However, as the number of transactions increases, the easiest solution is to connect the accounting software with the bank via API (e.g. Merit is connected to Swedbank, SEB and LHV). This way you can send payment orders directly from the software to the bank and the bank, in turn, sends the information on receipts and other transactions directly to the software. It is fast, convenient, operational.

Remember that transaction information and the end-of-month balance forwarded via API must be checked.

Bank transactions are conducted once a day and are not yet completely automatic and in real-time, as they still require a confirmation from the accountant. We recommend that you reach an agreement with your accounting provider regarding at what time each day bank transactions from the previous day should be entered. In smaller companies, bank transactions could also be entered once a week, for example.

If the API is not directly connected, payment orders can also be sent to the bank in a file form – you prepare them in the program, save as a file, and import into the bank. Bank statements can also be downloaded as a file and imported into the accounting software. Although this is more cumbersome than the previous option, it is still a pretty convenient solution. Especially when transactions are simple, purchase and sales invoices have already been entered, and there are a lot of transactions.

 

If you want more information on automating purchase invoices and receipts then please contact us.

 

Also read the first post in the same series on automating sales transactions: How to automate your accounting? Part 1: Sales transactions

Andres Aavik: the future of human jobs will be purely creative work

Posted on by Andres Aavik

Robots will not take jobs away from people, they will simply change the nature of those jobs, and for the better, because instead of performing mind-numbing work, future generations will be solely focused on solving creative problems – this is the claim put forth by proponents of automation. Automation and the digital transformation will not stop, but what will our transformed future jobs look like and will all of us be able to handle work that requires greater creativity?

Today’s four-year-olds are convinced that the first car they will buy will be a self-driving one. And they are probably right. At the same time, the U.S. currently employs 3.5 million truck drivers, whose skills will no longer be needed once self-driving cars take over. It is clear that this transition will take more than a few years, but can we imagine today how we could replace those jobs for the 3.5 million (mostly) men who have been working in the same occupation for years? Not to mention their countless counterparts in other countries.

According to McKinsey research, in 60 percent of occupations, over 30 percent of repetitive tasks could be automated. With current technology, restructuring tasks and business processes would allow about half of this amount of jobs to be made more creative. Out of the roughly 5 billion jobs in the world, technological developments and automation have implications for about 3 billion jobs, i.e. a very high number of people.

A change in how we think about robots

Job automation is not about putting an iron man on the team to move heavy objects around and perform other feats of machine strength. Robotic process automation (RPA) means entrusting repetitive and time-consuming activities to a robot, in order to free up employees for more value-adding activities.

RPA can be successfully implemented for boosting efficiency. For example, in Estonia, there has been a lot of talk of a leaner government over the years. Despite this, few actually effective solutions have been found. According to the Ministry of Finance, our public sector employs a fifth of Estonia’s total workforce, i.e. roughly 133,000 civil servants, which is an unreasonably high number for a small country such as ours. However, axing every other or third public official and dividing their duties among the remaining workforce would not make the state more efficient at its work. The best way to increase efficiency would be to automate the tasks that could be handled by a robot, so that human government workers could dedicate more of their time to more creative work. Only in this way could the work of 133,000 officials be done with 88,000 or even fewer people without anyone having to constantly work overtime.

Will human labour be needed at all in the future?

Automation reduces man-made mistakes and helps limit costs due to such mistakes. Robots can perform routine tasks faster and more efficiently, and are able to work 24 hours per day, 7 days per week, if necessary. They do not take coffee breaks, fall ill or ask for a raise or motivational rewards. So what makes human labour useful?

People who are not bogged down with routine and time-consuming tasks, such as data entry, verification, comparison, modification and collecting information from different systems, can dedicate more of their time to solving creative problems. Creative work is not just the realm of artists, designers, musicians and actors – tasks that require creative thinking can be found in nearly every occupation and include anything from negotiating and sales to developing new solutions.

While scientists in the U.S. are already testing an AI-based therapist for treating depression in soldiers, and a robot journalist has also been tested, most such jobs which require creating something novel to solve the problem at hand will continue to be done by humans, at least in the near future. Eliminating the routine parts of a person’s day-to-day work leaves more time for meaningful and value-adding creative work. This leads to happier employees, and increases their job satisfaction and creativity. Business owners also stand to benefit as it