HomeCFOs Realize Tax Can Be Utilized For More Than Compliance
Strategic Finance Leaders Look to Tax Department to Increase EPS
ATLANTA – (July 9, 2019) – Finance leaders are always looking for ways to drive profits and increase shareholder return. What CFOs may not be considering is that they can leverage their organization’s deferred taxes to grow earnings.
Since the enactment of the Tax Cuts and Jobs Act in 2017, large scale organizations have demonstrated the direct and extreme impact tax can have on EPS. For example, in 2018, a major telecommunications company announced that the TCJA would have a fiscal-year impact to earnings per share of approximately $4.10 – a significant increase as it was nearly a dollar more than the EPS for the entire 2016 fiscal year. But that was a one time improvement to the overall EPS.
Outside of Tax Reform, tax organizations can impact EPS by observing a large expense and recommending the optimal time to book the expense which will impact taxes each year, but not the long-term saving. Strategic tax departments can help drive how and when to take these opportunities to have an effect on their overall earning.
“Strategic tax teams help CFOs make decisions about how projects influence their overall balance sheet and provide guidance to the CFO when it comes to taking advantage of changing tax rates and regulations,” said Nick Alexander, Tax Product Director at PowerPlan. “With new tools available, tax teams now have the opportunity to use technology to not only report, but also strategically impact their company’s EPS.”
To learn more about the impact tax departments can make on EPS, download the free white paper, How to Leverage Tax to Enhance Earnings, at this link: http://bit.ly/2LyIN02.