Date Published 27 Sep 19


They have been deployed in the accounting departments at leading companies, big and small.

They are being used to automate tasks that used to be done by humans, from account reconciliations to intercompany netting and settlement.

And this is just the beginning of the robot uprising.

What does all of this mean for the people that work in these accounting departments? What do these departments look like now, what will they look like in the near future, and how will it all work? What is a Robotic Accounting Department (RAD)?

In this analysis, we will look at the effects of robotics and Robotic Process Automation (RPA) on the corporate accounting function, specifically focusing on Accounting and Reporting or the Controller Group, with additional consideration for Audit and Compliance.


Phase 1: The Automation Revolution

To understand what a Robotic Accounting Department is, it’s first necessary to understand the two types of robots being deployed today. Both of these are from a new breed that is very different than the big clunky metal monsters of yesterday.

In this age of virtualization, these are software robots that only occupy virtual space on servers and in the cloud. Where the two models differ is in both approach and scale.

The “Bottom-Up” Uprising

The first robot, and the one people usually mean when they use the term Robotic Process Automation or RPA, is at the more micro or worker level. These robots directly replace humans.

They take the form of a workstation, or more correctly, a workspace, and perform the same tasks that an accountant performs today. They pull information from one system, manipulate it, make decisions, and put the data or result into another system. Any manual, repetitive task where decisions can be reduced to a series of rules or solved by an algorithm can be automated in this way.

Looking at a task like a bank reconciliation, it becomes easier to visualize what these robots do and how they work.

In a typical process, an accountant would open a bank statement or file and look at the corresponding account or accounts in their ERP or General Ledger accounting system. She would match the transactions, looking for any discrepancies between the two systems. She would also identify any bank fees and charges, and book corresponding journal entries to record these.

RPA robots are possible now because of the digitization of this work. A machine can be programmed to retrieve the information in the same manner as the accountant, match the transactions to identify the discrepancies, and find and book the bank fees and charges in another digital system. A human would likely need to come in behind the robot and deal with any discrepancies or other exceptions that the robot couldn’t handle.

Setting up a robot to do accounting work in this manner involves looking at each task an accountant performs and determining which ones can be robotized. It involves mapping out the steps that the accountant performs while completing these tasks, building a set of rules or algorithms that govern any decisions that need to be made in completing these tasks, and programming a robot to follow these same steps. This may include accessing systems, scraping information from screens, manipulating data, and inputting information into other systems.

Since it starts at the individual or task level, it can be thought of as the bottom-up form of the robot uprising. Using this approach, manual tasks that are performed by humans are moved, task by task, to what are essentially robo-accountants.

The “Top-Down” Uprising

The other type of robot being deployed today, and the more commonly deployed form, works at a more macro or process level.

Accounting processes are the focus of automation, rather than individual accountant tasks. For example, an organization would look at its overall bank reconciliation process and design it to include automation as part of the standard accounting process and workflow.

The type of robot built to handle this would likely be part of a software platform built with a data connection and integration layer to the General Ledger or ERP system, so that it has access to the transactional details.

It would be set up to ingest the bank files, match them against these transactions, identify discrepancies, and route them to the proper personnel for investigation. And it would book bank charges and fees.

This approach can be thought of as the top-down form of the robot uprising, where top-level processes are what’s considered. Rather than the robot mimicking the accountant and needing to perform screen scrapes, data inputs, and other tasks, the robot is instead controlling the process upstream from the accountant, and routing exceptions to accountants to handle when necessary.

This is a more process-centric approach to RPA.

Interestingly, the two types of robots can be deployed together, with a process-controlling robot sending exceptions to a robo-accountant to handle. The roboaccountant uses its rules and algorithms to process what it can, and then routes any remaining items to a human to investigate.

Whether using a top-down, bottom-up, or combined approach, the end result is the same— work that was previously performed by humans is taken over by robots. And looking at the accounting departments across leading companies, it is safe to say that the robot uprising is in full swing.

Most of the companies that have automation in place have taken the top-down, process-centric approach, while some are also beginning to test and deploy RPA systems that use a bottom-up approach.

Whatever approach used, it is clear that workloads, jobs, and tasks are shifting from humans to their robotic counterparts.

To understand the overall effect this shift is having and to see where these accounting departments are going requires looking at things from a broader view.


Phase 2: The Great Process Shift

Typical corporate accounting workloads have never followed a smooth and steady flow. Transactions traditionally build up in the underlying systems of record—such as the company’s ERP or General Ledger system or the bank’s system for tracking account activity—until the end of the period.

After the period end, accountants begin the financial close, processing and verifying everything, which can include booking journal entries, reconciling accounts, analyzing balance fluctuations, performing intercompany netting and settlement, producing the financial statements and reports, and setting up systems to start the next period.

With automation, and much of this period-end work shifting to the robots, the end-of-period workload spikes become significantly more manageable. Freed from having to perform all of the manual tasks that robots now handle, accountants can focus on managing exceptions and spending time investigating discrepancies.

There is also more time to analyze results and look deeper at trends. Companies generally see reductions in overtime as well as less staff burnout and turnover. But again, this is only the beginning of the robot uprising.

When companies achieve a sufficient level of automation, they start to realize that there is a real advantage to connecting systems and data in such a way that robots can do the bulk of the work. This advantage isn’t just merely from the efficiency they gain through this automation; it is from the possibilities that this efficiency unlocks.

With their data sources connected to the robots, and the robots able to process all of this data quickly, there is no longer a need to wait until the end of the period to do that processing. The robots can process the data as it’s available, routing discrepancies and exceptions as they are identified to the accountants instead of waiting until the period end, and shifting the workload to be more evenly spread throughout the period. This shift transforms their traditional Record-ToReport (R2R) process to a new paradigm known as Continuous Accounting.

Thus, it is necessary to look at the Continuous Accounting process as a whole and to understand the role of both robots and humans in this process, as this forms the basis for the RAD.

The Robotic Accounting Department

Let’s imagine what it would look like to have all the robots in place, the data processing automated to its fullest extent, and Continuous Accounting fully embraced to ensure that processing is performed as soon as the data is available.

What would such an accounting department look like? What jobs would be left for humans, and what skills would they need? How would a RAD really work?


Data Ingestion

In a full RAD, all of the data sources are connected to a centralized processing and verification system. Human involvement is needed to set up these connections, so the system is aware of what data is coming in and to what it relates.

Processing & Verification

Once this is set up and the data is flowing, the robots would process the data. This would involve tasks like matching transactions between a point-of-sale system and an inventory system to ensure that there are no discrepancies, along with a host of other functions, including:

  • Matching transactions between different systems and identifying exceptions
  • Identifying fees and charges
  • Performing adjustments including depreciation and cost allocations
  • Certifying account balances
  • Performing compliance checks
  • Performing fraud checks
  • Identifying unusual balance fluctuations
  • Some of this processing would require the robots to be programmed with accounting rules and tables. For example, any cost allocations, their methodology, and the charges to which they apply would need to be set up, depreciation schedules would need to be established, etc.

    Again, human involvement would be needed to set up these rules and tables and to manage them on an ongoing basis, while the robots would do the bulk of the actual work.

    Exception Handling

    Data that is processed by the robots successfully with no issues moves on for analysis and reporting, while any exceptions or discrepancies that the robots can’t handle are then routed to the proper person to address. Humans would then handle these exceptions, investigating what they are and what caused them, performing any reconciliation of data from different sources, and making any necessary corrections or adjustments. Once complete, this data also moves forward in the process.

    Reporting & Analysis

    Reporting and analysis rules will also need to be set up and adjusted in order to produce the reports that are needed to answer any business questions the company has.

    Once set up, the robots would handle the report production.

    They may also perform some analysis, looking for patterns and trends. When it comes to the outputs from this function, humans are involved in looking at the results, considering their implications, and advising the business accordingly.

    The data flow doesn’t stop here, as processed and verified data would also need to be synchronized with source systems, so that systems of record are properly kept up-to-date.


    An additional point of human involvement comes in when it is time to perform audits. With this model, audit functions are centralized, with auditors able to access the system and see all changes.

    With robots performing the bulk of the processing, much less time is spent looking for human errors. When it comes to human work, with corrections, adjustments, and reconciliations entered into the system, there is also the ability to attach supporting documentation and link to policies and procedures, simplifying the auditing of this work as well.

    Robots may perform checks and be involved in the audit analysis, looking for patterns and trends. Thus, in this system, the work of auditing is dramatically simplified and streamlined.


    With this system of software robots doing the bulk of the processing and verification, as well as controlling the workloads of the humans downstream, we can now say that this is truly a RAD.

    However, while robots may be controlling the workloads of humans in terms of handling exceptions and investigating discrepancies, humans are still at the core of the RAD.

    Looking at the RAD in a more human-centric way, people are at the center of decision making and analysis, surrounded by a team of robot assistants that give them a real-time view of what’s going on in the business.


    Looking at the setup of this RAD, we see that humans are still involved in several areas. This involvement can be classified into six main roles.

    Technical Guru

    The Tech Guru is a growing role today, as more automation is implemented. It requires technical background, an understanding of systems and processes, and accounting knowledge.

    As organizations move toward a RAD, a lot of setup will be needed. These connections and settings will need to be monitored and updated when things change, including systems, business models, or structure.

    This isn’t purely a tech job however, as the person performing it will need knowledge of corporate entities, account structure, and accounting roles and workflows. They may also be involved in setting up templates for things like journal entries and reconciliations and establishing checklists for work performed by humans.

    Smooth Operator

    When it comes to setup for things like cost allocations or depreciation, someone with accounting knowledge needs to be involved. This role may also set and monitor materiality, balance fluctuation, and other thresholds and risk profiles that determine when further investigation is required.

    The Smooth Operator oversees the processing rules to ensure the robots operate smoothly. They will resolve any discrepancies that the robots can’t handle, as well as any human-performed corrections, adjustments, and reconciliations.

    Today’s staff accountants are essentially Smooth Operators, and the RAD requires less Smooth Operators and more Business Advisors. Business Advisor This is the true advisory role that is at the heart of the accounting profession. Reporting and analysis is becoming more critical than ever, and the Business Advisor will set up the required reports and look at their results.

    Access to real-time data is key to inform the business of where things stand and where they are going. Therefore, a Continuous Accounting model must be in place so the Business Advisor can deliver reporting, analysis, and advice at the point of need.

    Fraud Sniffer & Compliance Maven

    There are two additional specialty roles that arise when you consider the subjects of fraud and compliance. When it comes to both, monitoring and controls are the primary concerns.

    There is a needed role for establishing monitoring rules, overseeing controls throughout the organization, and dealing with any potential issues in these areas that the robots identify. With one focusing on fraud and the other on regulatory compliance, each role is equally important.

    These specialized roles call for a bigger picture perspective that considers the implications of processes and controls.

    The Fraud Sniffer takes more of a P.I. approach, based on an innate understanding of human psychology and motivations.

    The Compliance Maven understands structure and verification, is very detail oriented, and likes checking the boxes.


    The final role is that of the Auditor. While this is simplified and streamlined in the RAD, there will still be a need for external review to verify that standards are being followed and accounting is properly performed.

    In the RAD, the Auditor can now focus on the important decisions the company has made in how it accounts for things, with much less emphasis on the processing itself being done correctly.

    This will require broad knowledge and a high-level approach to effectively perform analysis, while looking for deeper issues beyond human error.

    Together, these six roles:— The Tech Guru, Smooth Operator, Business Advisor, Fraud Sniffer, Compliance Maven, and Auditor—make up the RAD.


    This is the accounting department of the future, led by the RPA revolution of today.

    It will be driven by increased automation, with the larger workloads handled by robots. There will be fewer exceptions—as rules, AI, and machine learning continue to become more intelligent, and the robots learn to handle more and more exceptions themselves.

    This will mean less investigations and corrections performed by humans, and an increasing shift of time to other tasks. It will also mean quicker access to verified data and a near real-time picture of the detailed financial health of the business.

    These more sophisticated robots will be able to assist with compliance, fraud mitigation, and analysis in more advanced ways as well, furthering the shift in human workloads to strategy and business decision support.

    The end result will be a new world in which accounting systems become the center of intelligence for the financial health of the business.

    Accountants will function purely as trusted business advisors, their role being to explain the financial health of the business to their peers in other departments and to advise on the financial impact of their decisions. They will be knowledge workers in the truest sense of the term, as their job will be purely to handle and use information.

    Thus, in this way, the RAD will free humans to think and unleash their full human potential.

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