The Morning Ledger: Companies Leave Bean Counting To The Robots

Good morning. Executives at companies including

Nokia Corp.,

Royal Dutch Shell PLC and

Orange SA are

turning towards technology in a bid to make their finance and treasury functions more effective.

 Two thirds of large global companies expect to automate some or most of their finance-department tasks over the next two to three years, according to new research by

The Hackett Group Inc.

Statoil ASA, the Norwegian energy firm, has developed a robot called Roberta that is searching for missing payment information and sending out reminders. Roberta is the first piece of robotic software to work in the company’s treasury department, part of a push towards automation, robotics and artificial intelligence.

Finance departments are seeing results from the increased sophistication of robotics and automation tools: digital transformation can cut labor and outsourcing costs by 20% to 35%, according to Hackett. But finance executives aren’t turning to robots just for savings. Automation can cut error rates by up to 66%, according to the Hackett report. It would also facilitate more analysis and smarter decisions by allowing employees to reduce the time spent on data collection by 24%.

“Cheaper is one half of the equation, but it’s got to be better as well,” said Nilly Essaides, senior research director at Hackett. Companies that require work on both fronts tend to benefit the most from installing such technologies, she said.

THE DAY AHEAD

Deadline for new Amazon site closes. As

Amazon.com Inc. is set to close on Thursday the request for proposals for its second corporate home, its in-house economic development team shows how important tax-incentive deals have become to its business model and gives a window into why the company took the step of pitting cities against each other to win the biggest subsidy package possible.

30 years after Black Monday. Thursday marks the 30th anniversary of Black Monday, when the Dow Jones Industrial Average dropped 508 points, its biggest decline ever.

Verizon Communications Inc. is scheduled to report third-quarter results.

CFO JOURNAL EXCLUSIVE

New accounting rules could shift pension investment mix. New accounting rules could prompt companies to accelerate the shift towards investing pension plans in safer, fixed-income assets, writes Tatyana Shumsky. The new guidelines — effective for public companies for annual reporting periods starting after Dec. 15, 2017 — focus on how and where on financial statements companies record pension plan expenses.

CORPORATE NEWS

John Flannery, GE’s new chief executive, is seen in New York, N.Y., U.S., Sept. 30, 2016.
Bloomberg News

GE’s new chief makes cuts. John Flannery, the leader of

General Electric Co. for just 2½ months, is expected to unveil next month thousands of corporate-level job cuts and scale back GE’s global structure, people familiar with the matter told the Wall Street Journal.

Meanwhile, competitor

Siemens AG is said to be planning an overhaul of its power and gas unit which could involve thousands of redundancies, reports 

Germany’s Manager Magazin. 

American Express CEO to step down. Kenneth Chenault, the head of

American Express Co., will step down as chairman and chief executive Feb. 1, capping a 16-year run at the iconic card company.

Equifax faces shareholder call for governance, pay changes. An adviser to union pension funds invested in

Equifax Inc.,

CtW Investment Group, proposed several moves to bolster the board’s oversight of the firm’s management.

Hewlett Packard Enterprise to return more money to shareholders.

Hewlett Packard Enterprise Co. approved $5 billion more to buy back stock as part of a pledge to return most of its cash to shareholders and gave a mixed view for 2018.

Kobe Steel’s aluminum passes safety checks. Toyota Motor Corp.,

Honda Motor Co. and

Mazda Motor Corp. said Thursday they haven’t found vehicle-safety issues from aluminum supplied by

Kobe Steel Ltd., which sparked world-wide concern when it admitted falsifying documents about the metal.

Meanwhile,

Nissan Motor Co. will suspend production of vehicles for the Japanese market after unauthorized workers were found to be certifying cars even after an earlier instance of that problem had been discovered,

reports the Financial Times.

Unilever’s U.S. sales hit by hurricanes. 

Unilever PLC on Thursday reported weaker third-quarter revenue growth as the maker of Breyers ice cream and Dove shampoo struggled with lower sales in developed markets.

Nestlé under pressure to boost returns. Nestlé SA said a key sales measure weakened in the first nine months of the year and that it doesn’t expect an improvement in the final quarter, underscoring the pressure it faces to improve its performance, including from activist investor Daniel Loeb.

Hochtief launches bid for Abertis. Germany’s

Hochtief AG on Wednesday made a €18.6 billion ($21.9 billion) offer to buy

Abertis Infraestructuras SA, gatecrashing an effort by Italy’s

Atlantia SpA to acquire the Spanish toll-road operator.

Blue Apron lays off workers. Blue Apron Holdings Inc. is laying off employees as the struggling meal-kit company continues to try to improve its financial position after a difficult initial public offering this year.

LSE chief to leave.

London Stock Exchange Group PLC on Thursday said Chief Executive Xavier Rolet would leave the company by the end of next year, bringing down the curtain on a tenure marked by a big bet on index services and a failed attempt to create a pan-European exchange.

REGULATION

The headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C., U.S.
Reuters

SEC names top exchanges regulator. The U.S. Securities and Exchange Commission on Wednesday tapped

J.P. Morgan Chase & Co.’s top electronic-trading executive as a senior regulator. Brett Redfearn will become the SEC’s director of trading and markets, making him the agency’s point person for regulating exchanges, broker-dealers and high-speed trading firms.

Changes in store for foreign companies’ tax treatment in U.S. Foreign companies operating in the U.S. could face major changes in their tax bills under an overhaul being planned by Republicans. Those could include new surtaxes or limits on how much the companies can deduct on certain expenses such as rent, royalties and interest on debt.

Meanwhile, the leaders of the Dallas and New York Federal Reserve banks

warned Wednesday that any overhaul of the tax code that emphasizes deficit-boosting tax cuts over making the system more efficient could bring short-term gain but lead to long-term pain.

China to grant foreigners greater access to banking sector. The China Banking Regulatory Commission, the country’s top banking regulator, said Thursday that it will provide foreign investors with greater access to its banking system, reports Reuters.

Former Uber executive dropped from lawsuit. 

Uber Technologies Inc.’s former chief business officer, Emil Michael, was dropped as a defendant in a lawsuit that alleges top Uber executives invaded the privacy of a woman raped by a driver in India.

JBS halts work at slaughterhouses amid tax dispute. Brazilian meat packing firm 

JBS SA said Wednesday it stopped the purchase and slaughter of cattle at seven abattoirs in the state of Mato Grosso do Sul after a local court froze about 730 million reais ($230 million) of assets belonging to it and its holding company.

ECONOMY

Workers assemble washing machines at a Whirlpool plant in Clyde, Ohio, U.S., Aug. 29, 2017.
The Wall Street Journal

Economic activity grows. Economic activity grew in September and October, despite sector-wide disruptions caused by hurricanes in the southern and eastern U.S., according to a new report by the U.S. Federal Reserve.

GOP divided over monetary policy. After criticizing the U.S. central bank for the past eight years, U.S. Republicans finally have a chance to change the course of the central bank when President Donald Trump nominates someone to take the helm in early 2018. But they are divided over which direction monetary policy should take.

Most U.S. states unprepared for next recession. If the next recession hit the U.S. this year, more than a quarter of states would be financially unprepared to weather even a moderate downturn, according to a new report.

Chinese economy keeps steady pace. China’s economy expanded at a robust 6.8% pace in the third quarter, meeting market expectations, as traditional growth drivers such as manufacturing and exports gained steam. Meanwhile, the country’s central bank chief issued a stark warning about asset bubbles,

reports Reuters.

U.K. to introduce monthly GDP measure. Britain’s Office for National Statistics said on Thursday it will introduce a monthly measure of gross domestic product (GDP) in July next year, writes Reuters.

CFO MOVES

Vattenfall AB, a Swedish energy company, said it has appointed

Anna Borg as chief financial officer, effective Nov. 1, 2017. Ms. Borg currently serves as senior vice president of the company’s business area markets. She succeeds Stefan Dohler who will become CEO of German energy company

EWE AG. Compensation details were not immediately available.

The Morning Ledger from CFO Journal cues up the most important news in corporate finance every weekday morning. Send tips, suggestions and complaints to the editor:

kimberly.johnson@wsj.com.

Source : https://blogs.wsj.com/cfo/2017/10/19/the-morning-ledger-large-global-companies-leave-bean-counting-to-the-robots/

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