Corporate Tax Holiday Would Trigger Return of Cash for Fintech Investment

According to C2FO survey, corporate tax holiday would trigger
return of cash to US shores for fintech investment

Repatriated cash would go to financial technology as it improves performance metrics

KANSAS CITY, MO., DEC. 12, 2017 – If the Trump administration were to cut taxes for corporations or approve a repatriation tax holiday, a new survey reveals that 46 percent would return the cash to the United States. These findings were released today from C2FO, the world’s market for working capital®, which surveyed 274 finance and treasury professionals at the AFP 2017 Treasury & Finance Conference in October 2017.

When asked where exactly the addition of new cash would be invested, aside from paying down debt or typical buy-backs/investor derivatives, respondents put technology updates (62 percent) and short-term, low-risk investments (59 percent) at the top of their lists. The remaining respondents said research and development (46 percent) and trade finance programs for suppliers (14 percent).

“In the age of digital transformation, cash spend has shifted towards high yield, low-risk growth strategies including supply chain and trade finance innovation,” said Sean Van Gundy, managing director of working capital advisory for C2FO. “This investment, especially in the area of supply chain technology, not only improves supply chain health but has the potential to significantly impact the bottom line.” 

Fintech Can Improve Performance Metrics 

Financial technology is becoming an attractive investment due to its potential to improve performance. An overwhelming majority (95 percent) of financial professionals surveyed agree that financial technology can improve their performance metrics.

When asked which metrics were the most important in measuring success, the majority (63 percent) selected working capital position, 25 percent chose EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and the remaining 12 percent were evenly split between DSO (Days Sales Outstanding) and DPO (Days Payable Outstanding).

“It’s encouraging to see that companies agree that fintech is mission critical to their long-term financial performance,” added Van Gundy. “Based on the survey results, with finance and treasury professionals focusing on working capital position versus singular metrics like DPO, it’s more important than ever to prioritize investment in trade finance technology that increases supply chain visibility for better risk management and working capital optimization.”

About C2FO®  

C2FO is the largest working capital marketplace in the world. Companies across the globe use C2FO to increase their operating income while simultaneously producing vital working capital flows to their supply chains. C2FO is a leader in retail, industrial, manufacturing, energy, healthcare, technology, telecom and transportation sectors. C2FO is Collaborative Cash Flow Optimization. Learn more about C2FO.

Methodology

C2FO conducted this research at the AFP 2017 Treasury & Finance Conference, held October 15-18, 2017, in San Diego, CA. The 274 respondents were treasury (81 percent) and finance (19 percent) professionals.