The jury is still out on how individuals feel about the Tax Cuts and Jobs Act, but CFOs couldn’t be happier about it. With the massive amount of money saved from the tax cuts, CFOs are understandably optimistic. In Q1, CFO optimism jumped to its highest level since ’96. Whats more, finance chiefs laid out their plans for spending the tax cut surplus which, no doubt, will stimulate the economy.

TAX CUTS: WHERE IS THAT MONEY GOING?

According to the results of the latest Duke University/CFO Global Business Outlook survey, which ended March 2, more than 40% of U.S. companies plan to boost wages and 38% to increase hiring in 2018 because of the recent tax cuts. About 36% will increase domestic investment and 31% will increase cash holdings. And, among companies with defined benefit pension plans, 29% said they will boost pension contributions.

Sixty-six percent of U.S. CFOs said corporate tax cuts will help their companies over the next three years, with 36% saying the overall benefit will be medium or large. Only 14% rated the overall effect as negative. “Some benefits of tax reform are already being felt, while others will unfold over the next several years,” said John Graham, a finance professor at Duke’s Fuqua School of Business.

Among companies that plan to increase investment in the United States, 53% said the reduced corporate income tax rate was the reason. Forty-four percent indicated the immediate expensing of capital expenditures enacted under the new law was driving their change in U.S. investment plans. Full expensing of qualified capital expenditures last for only five years, however, and 37% of companies indicated they would shift investment so that it occurs sooner.

*info in this section was provided by CFO Magazine – you can read the full article here.

WHAT NOW?

Increased tax cuts result in a boost in corporate spending – it’s as simple as that. With an increase in capital expenditures on things like technology, equipment, and business solutions, solution providers and equipment manufacturers need to be as vigilant as ever to capitalize on the increase in spending. This is not, however, a license to pitch solutions without regard for the fiscal impact of these large capital purchases. CFOs are as focused as ever on saving money and passing those savings onto the company and their employees.

With CFOs focused on creating accurate projections for their companies, factoring in technological expenses can be difficult. Often times, technology or equipment purchases are infrequent and expensive – leading to projection hurdles that can be avoided altogether through financing. When large-capital purchases are broken down into monthly payment installments, the cost of acquiring technology or equipment becomes a regularly occurring expense that helps CFOs account for expenditures in real time. This also helps CFOs calculate ROI in real time, allowing for more accurate forecasting.

CONCLUSION

While there are plenty of reasons for companies to be excited about the new corporate tax breaks, there are even more reasons for salespeople to be overjoyed. A boost in savings means there is more opportunity to help companies achieve the efficiency and productivity they strive for via technology. By financing these purchases, salespeople can help CFOs with their projections and accounting, bringing more value than ever to their customers.

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