Identify Incentives To Increase Your ROI

Business incentives are available in most jurisdictions that offer businesses significant tax and financial benefits for investments in jobs, capital investments and research and development activities.  These incentives reduce above-the-line operating costs, enhance cash flow and provide significant tax savings, while raising the return on investment.  It’s critical to understand the importance of pursuing these incentives before any investments are made and even before any public announcements.

Evaluate Your Current Tax Incentive Program

Business Incentives Advisory is the first step for a business who wishes to improve their current efforts of securing business incentives.  It includes evaluating your existing process and addresses the following:

  1. Your existing process to manage your overall incentives program. Are the right people participating in the process?  Are you establishing goals and tracking performance? Are you conducting regular meetings with key people from the applicable business areas?  Do you have executive buy-in and support?  Are people held accountable for supporting the effort?
  2. Evaluate whether programs should be completed internally by company personnel or outsourced to a qualified service provider. Does it make economic sense to pursue an incentive program? If so, who should complete the work?
  3. Evaluate the efforts of company personnel or the service provider completing the work. Are they doing a good job?  Are you reviewing performance from year to year and understanding any change in results?  Are you making changes in your approach to improve on poor results?
  4. Confirm you are identifying the available opportunities. Are you conducting an annual review to ensure you are identifying new opportunities and maximizing existing opportunities? 
  5. Review your technology, tools and internal processes.

Business Incentives Advisory is about organizing an overall strategy for identifying, capturing, maximizing and managing of the business.

Are these incentives significant?  They result in businesses receiving over $80 billion a year from thousands of programs.  It’s important for businesses to consider capturing their fair share since you may be at a disadvantage with your competition if you aren’t capturing tax incentives. A business can receive a federal hiring credit of $2,400 for hiring a person who qualifies for the Work Opportunity Tax Credit.  In highly competitive industries like retail or food service, how much in sales must a business earn to generate a profit of $2,400?  It is not uncommon for businesses to receive hundreds of thousands of dollars annually in business incentives.

Benefit Of Participating In Incentive Programs
  1. Reduction in operating costs
  2. Increase business net income by reducing certain expenses
  3. Provide reduction in business' federal and state tax liability
  4. Generate funding for certain areas such as training employees and infrastructure improvements
  5. Allow HR and Tax Departments to generate additional revenue for the business
  6. Additional funding can be used to offset effects of cutbacks and/or provide funding to other special projects
  7. Participation in incentive programs can play a significant role in a business' expansion plans by increasing the return on investment