How Tax Changes Will Affect New Equipment Strategy and Procurement

That’s an important question right now and one with an exciting answer.  Businesses have been investing in equipment upgrades over the past year at a rapid pace and that trend is set to continue into the foreseeable future.

With significant changes to the tax code, corporations are set to parlay savings into necessities like expanded and upgraded truck fleets.  For example, Class-8 truck purchases exploded last October, increasing by 62%.  Large companies like Costco are buying them at a rate which has increased 167% from the same time last year.

The passage of The Tax Cuts and Jobs Act of 2017 is projected to save manufacturing companies alone $261 billion.  The Equipment Leasing and Finance Association reports that procurement of items like software and other equipment is slated to rise by over 9% – more than twice 2017’s purchasing figures.

Overall, investments like these are projected to represent economic growth of 2.7% over the coming year, as sectors like medical, construction and transportation upgrade existing resources.

The TCJA and leasing.

The TCJA has effectively reduced the corporate tax rate to 21%.  But there’s an off-the-top write off for equipment purchases.  C corporations my now expense depreciated assets, which is a significant change.  The Act also permits qualifying acquisitions to be written off in the same year they’re obtained, as a means of spurring investment.

Leasing wins over taking out a loan for new equipment, with The Act seeing those with Operating Leases enjoying a lower cost than they would for a loan or even a cash purchase.  Operating Leases reflect the current value as the amount of the asset, keeping it partially off the balance sheet.

Cash flow is also improved by the additional savings from ROA (Return on Assets), ROIC (Return on Invested Capital) and ROCE (Return on Capital Employed).  With flexible financing, long-term payment, and upgrades or add-ons to equipment, the bottom line is bolstered.

All these factors represent an enormous benefit, including the ability to remain ahead of the curve on technology and harmonizing acquisition strategy with the needs of the business.

Procurement strategy matters.

With the advent of the TCJA, a closely monitored acquisition strategy is needed.  In the transportation sector, more organizations than ever are leasing vehicles.  Abbreviating the asset management cycle has a huge impact on outlay.  Also, leasing represents reduced risk and lower costs for fuel, repair and maintenance and disposal.

Understanding the differences inherent in the type of lease (operating against capital) is a big step toward enhanced financial performance.

Procurement made easy.

Corporations all over the USA are excited to take advantage of the TCJA and the opportunities for expansion it represents.  With the CenterPoint Group, you’ll have access to focused knowledge about procurement and the power of numbers, too.

We’re a trusted procurement advisor that leverages $850 million in collective indirect spend for our members, which lowers your business costs on everyday purchases.

Our global agreements cover North America and Europe, opening the door to superlative savings.  Contact us for more information.

The post How Tax Changes Will Affect New Equipment Strategy and Procurement appeared first on Centerpoint.

source http://centerpointgroup.com/tax-changes-will-affect-new-equipment-strategy-procurement/

An employee purchasing program is a smart buy for your company

The power of numbers doesn’t end with your everyday purchases when you work with CenterPoint.  Your employees get to save money, too.  That’s why an employee purchasing program is a smart buy for your company.  It provides your people with the same level of opportunity the company itself enjoys, spreading the procurement advantages to one and all.

Hidden need.

Your workplace is busy.  It’s difficult to keep track of employee well-being – economic wellbeing, especially.  But some of your employees, especially in this fiscal climate, may be struggling to make ends meet.

More than 3/4s of working people in the United States report living paycheck to paycheck.  Less than half have more than $1,000 in the bank at any given time, to cover contingencies.  Precarity is a common condition for many Americans.

With predatory lending, high-interest rates on credit cards and time purchases, all it takes is one emergency expenditure to put many families over the edge.

And that’s an opportunity for you.

Standing in the gap.

A voluntary employee purchasing program is an ideal way for companies to stand in the gap and lend struggling employees a needed hand.

By leveraging the buying power of your company and the reduced costs you enjoy when working with a procurement resource like CenterPoint, you can support your employees with access to the same prices you pay.

Items like children’s school supplies can be expensive, but your company is already purchasing many such items at a tremendous cost saving.  That can be passed on to your employees, with purchases deducted from their paychecks, under the plan.

But the benefits of an employee purchasing program don’t stop there.  Savings you enjoy on household necessities like paper towels and cleaning supplies can also make a significant difference in employee financial health.  Even toner cartridges for the family printer or bottled water can spare struggling families needless expense.

We help you help them.

CenterPoint Group can help your company help your employees.  We leverage the purchasing power of numbers with over $850 million in collective indirect spend.  That saves you money and with a voluntary employee purchasing program, you pass those savings on to employees who may be living paycheck to paycheck.

That can really make a difference in people’s lives.  When you’re that quality of employer, employees respond positively and in that positive response is the stuff of increased engagement, a positive work environment, and employee retention.

These are benefits which can’t be ignored.  Happy employees stay on, saving your company the cost of turnover and recruitment.  When productivity is enhanced, you’ve created a win/win/win situation.  Everyone benefits.  No one loses.  And the spinoff benefits are material.

For a minimal investment on the part of your company, you create better lives for your valuable human resources and a better public profile for your business.

With a trusted procurement advisor like CenterPoint, all things are possible.  You save money on everyday business needs and your employees share in those savings.  Contact us to find out more.

The post An employee purchasing program is a smart buy for your company appeared first on Centerpoint.

source http://centerpointgroup.com/employee-purchasing-program-smart-buy-company/

How efficient packaging can save money on shipping costs

Packaging has a lot to do with the quality of your operation.  Many companies think that keeping shipping costs in line requires reducing the quality their packaging.

But that can cost you.  Responding solely to price point can leave you exposed to unhappy customers when their products arrive broken or damaged.  In these days of online reviews, news of incidents like that can travel at the speed of light, representing a public relations exposure you’ll be picking up after for some time to come.

The trick here is to think of packaging not so much as a line item and more as a value-added service.  You want the goods to arrive in one piece, so reconsidering your attitude toward shipping is more about efficiency than what materials cost.

Let’s look at how efficient packaging can save money on shipping costs.

A better mousetrap.

That flat rate on budget shipping boxes has a tempting price point, but do you trust it to protect the contents you’re shipping?

And that’s the real question.  If you’re shipping something fragile or expensive, it matters what you’re shipping it in.  So, instead of the budget shipping boxes at the tempting price point, go for the corrugated box that’s going to protect what’s in it from damage.

Disappointed customers aren’t worth opting for a cheap shipping box.

Too much. Not enough. Just right!

When shipping small items, using the right amount of packing material to hold them in place and prevent damage, is another consideration.

Too much of a good thing (packing popcorn), or a box which is too small for the article being shipped can both present problems.  That box can break and then you’re on the hook for the damaged article and have lost critical customer satisfaction.

Not enough of your chosen packing material in an over-sized box can also be problematic, due to the item being shipped moving around, exposing it to damage.

Finding the balance is key here.  That means cost-effective packing materials which also protect products in the shipping process.

Layers which protect.

Use the strongest, most effective packing material closest to the item.  From there layer, outwards using less expensive materials. Because you’ve utilized a costlier material to wrap your item in, successive layers needn’t be of the same quality.

Leaving a two-inch perimeter between your inside-the-box materials is another key shipping strategy.  This can prevent injury to the product and reduce the number of materials used, saving you money.  Mileage may vary, depending on the shape, size, and fragility of the item being shipped.

Reputation matters.

As we said at the beginning of this post, the way you ship things has a great deal to do with public perception about the quality of your company.  Exposing yourself to unfavorable online reviews and the loss of customers just isn’t worth choosing the cheap means of shipping things.

CenterPoint Group is a trusted procurement advisor which leverages over $850 million in collective indirect spend to save you money on your everyday business purchases.  Contact us.

The post How efficient packaging can save money on shipping costs appeared first on Centerpoint.

source http://centerpointgroup.com/efficient-packaging-can-save-money-shipping-costs/