Declining profits at iconic tool maker Stanley Black & Decker recently led to cost-cutting layoffs, with reports the firm is laying off 1,000 finance employees amid larger cuts.
Stanley Black & Decker aims to shave $200 million from its costs by the end of the year, as inflation continues to rage and demand for its products declines. The company’s quarterly profit has declined by more than 80% over the past year.
Automation and streamlining accounting functions may have played a part in the company’s decision to target the finance team for layoffs. PYMNTs research shows that CFOs are prioritizing investment in software solutions that automate various finance processes.
Stanley Black & Decker’s commitment to cost-cutting manifests in the fact that Corbin Walburger, its current CEO, was previously the company’s CFO — and is likely well familiar with how automating and streamlining inefficient finance processes can lead to labor redundancies.
CFOs Willing to Invest
A recent PYMNTS survey found that 74% of CFOs at large companies see payment operation digitization as “very” or “extremely” important to their business goals. Meanwhile, 62% of CFOs of large companies said that digitization contributes to cost reduction.
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Some of cost cuts are achieved by automating finance processes, which sometimes allow a company to get away with employing fewer people. And as labor shortages persist and inflation continues to rock markets, we are likely to see more companies automate their financial processes and reduce their workforce.
Why Companies Automate
Software solutions that automate processes have been sprouting up and offering companies a way to save on labor costs. That is particularly true of accounts payable and receivable.
“AI-based systems can be particularly useful in reviewing and processing reports and invoices on the back end, identifying and flagging suspicious patterns that might indicate fraud, funds misuse or policy violations”, according to recent PYMNTs.com coverage. This can free up the time of finance team employees, as they no longer have to verify each transaction by hand.
Last week, business payments platform Roundtable said it’s investing in optical character recognition for invoice processing. Roundtable CEO Omri Mor believes that “teams who aren’t taking advantage of automation, are wasting valuable time by scanning through invoices and inputting information manually.”
The CEO of OpenEnvoy, an automated payments platform, Matt Tillman, believes that manual checks for discrepancies in invoices are becoming “too costly” “in an increasingly real-time world,” due to the “amount of human touch involved.”
Not only does this type of automation save time for employees, allows finance teams to reallocate resources but it also makes auditing more efficient, but it can also reduce errors.
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