Does the amount of cash flow obtained by companies affect the level of investment in research and development (R&D)? To answer this, we look at empirical research to investigate the impact of cash flow on R&D expenditure. Firstly, cash flow can be defined as the movement of cash into or out of a business, project or financial product. In this particular case, the movement of cash into R&D expenditure. Previously, a large number of empirical literature has quantified the role […]
In today’s economic climate, cash flow management remains vital to the health of businesses. The universal business aphorism, “turnover is vanity, profit is sanity but cash is reality” continues to be sage advice for anyone managing company financing. In fact, one in five (20.3 per cent) of Australian businesses believe an inability to access funds is the biggest barrier to business growth and innovation, according to the Australian Bureau of Statistics (ABS). However, many companies focused on innovation are missing […]
In our previous post, we paralleled government grants versus the tax system in accessing R&D funding. However, it is a little-known fact that companies can actually claim both concurrently. If you are eligible for the R&D tax incentive and you receive a government recoupment (such as a government grant or reimbursement) that relates to expenditure that is eligible for the R&D tax incentive, then clawback applies. To elaborate, take for example a company that is eligible for the R&D Tax […]
In Australia, there are two main types of government funds available for technology or product advancement. These funding mechanisms are either administrated through a grant-based system or through tax breaks, such as the Research and Development (R&D) Tax Incentive. However, where support for R&D is called for, an important question remains: should reliance by companies be placed on cash support (grants), or on the tax system as a mechanism to deliver cash flow? Firstly, there are a number of […]