1) Experience focusing on the right details of the project (SR&ED consultants have deep knowledge of the federal grant program and will ask your team targeted, relevant questions to save your time and ensure your company gets every dollar it is entitled to).
2) The ability to look at your technology advancement from a scientific perspective to maximize your SR&ED claim. (Consultants find more qualified work by looking at your technology from multiple angles, including projects and supporting activities to maximize the dollar value of your SR&ED claim).
3) The ability to communicate the process effectively. (SR&ED consultants typically have a key turn-around process that is streamlined to ensure a smooth process and save you time to focus on other business operations or product development. Being able to communicate the process in a methodical way facilitates the process and ensures everyone is on the same page from the start).
4) Defending your SR&ED claim: Providing comprehensive support in the event of an audit; reducing the possibility of rejection. (Some SR&ED consultants will communicate with CRA auditors on your behalf to protect your SR&ED claim and provide supporting arguments should the SR&ED submission be challenged).
5) Proper bookkeeping to support your claim. (Consultants will assist you in preparing proper supporting documentation and help you structure your SR&ED submission accordingly).
6) Proactive bookkeeping support – assisting your company with time/project management. (SR&ED consultants have proprietary enhanced software to process your SR&ED tax credit applications, other software includes project management/time tracking software used to package your SR&ED submission in an efficient manner.
7) SR&ED consultants use a proven, streamlined process for success and time savings. (SR&ED consulting firms have designated staff responsible for specific tasks and milestones in the process. This is an internal, systematized approach that is precise and time stamped to verify that no steps are missing and that the correct parties have been followed up).
8) Industry experts who are experienced SR&ED specialists can concisely put down on paper the technical elaboration in a manner consistent with the program criteria. (CRA has reduced the character set to ensure that only key technological advances are included).
9) SR&ED consultants understand the SR&ED program requirements inside and out. Some consultants have both financial and technical backgrounds. (The SR&ED is a complicated program that includes document collection, a technical letter with strong supporting arguments, and a financial section. SR&ED advisors prepare the application for your accountant to submit to your taxes).
10) Knowledge of all CRA SR&ED application guidelines (It is important to understand SR&ED rules and include supporting arguments relevant to advancing technology or improving a process. An elaboration that is irrelevant to the SR&ED criteria, such as: Business, Marketing or Sales Progress, will most likely trigger an audit to review the entire claim as it does not focus on technological or scientific progress. Additionally, smaller firms will follow up with the CRA to facilitate reimbursements).
11) Technical expertise that fits your business niche. (When selecting the right SR&ED consultant for your company, you want to make sure they specialize in your business niche and have industry knowledge and experience to fully support your SR&ED application. Hiring juniors or consultants who do not have industry knowledge/experience will be detrimental to your SR&ED application as they may not use proper industry jargon and may not be as effective in defending or providing supporting arguments).
12) Understand the language of the SR&ED program, including deadlines, terminology, and which tax forms to use. (As with any business, you must understand the business and the industry to be successful. It is important to consult your consultant/SR&ED service provider before deciding to submit your application. Always ask for references/testimonials and choose a firm/consultant that has a proven track record).
13) If you do not initially qualify for an SR&ED claim. Some consultants will guide you and give you advice on how to prepare effectively. Since consulting firms are connected to industry networks, they may have key strategic relationships that would help you grow your business. Such insights can be provided to you as part of the service.
14) Training for your next SRED application. (Some SR&ED consultants provide hands-on training for SR&ED tax credit preparation. This includes training your team to understand what areas are important for SR&ED and specific bookkeeping practices).
15) The SR&ED program can be ambiguous and have many gray areas. SR&ED consultants are focused and understand how it applies to your development. (The SR&ED program is not black and white. There are many ambiguous activities that may be considered eligible SR&ED expenditures. These are typically supporting activities to core R&D that you can’t do without the others.)
16) Consultants save you time to focus on product development/business operations (The time you would spend to train your internal resources on the complexity of the program would typically be greater than the dollar amount spent to hire an SR&ED expert).
17) Less time spent and greater return on investment while freeing up internal resources. (Your development team can focus on what they do best, product development, and maintaining their momentum is more efficient than boring them with mundane, complicated tasks that can in turn work against you and cause a stir if done incorrectly).
18) Creating an SR&ED application yourself may be insufficient or inconsistent. In most cases, you leave money on the table and risk triggering an audit or standing out – SR&ED consultants deliver targeted results. (Related to the point above, SR&ED consultants will not put your company in a position that would hinder your claim. In most cases, SR&ED consultants work on a contingency basis, which ultimately means they work with you and are compensated only if you receive reimbursement. If the dollar amount of reimbursement decreases, so does their compensation for the SR&ED preparation service).
19) SR&ED professionals avoid common mistakes, such as writing technical reports that focus heavily on new features and benefits that a new product will bring to the business and present it as a business project rather than an SR&ED project. (These mistakes lead to audits and red flags at CRA) (It is critical to focus only on technology advances/challenges and not on business/marketing/sales or other unrelated activities).
20) Poor correlation between technical reports and financial reports could also trigger CRA review. (The financial report should be a reflection of your technical report and consistently support your SR&ED claim).
21) Changes to SR&ED are constant – SR&ED consultants are up to date and keep abreast of current changes to the program. (CRA legislation changes from time to time and it is important to stay current so that your application reflects these changes).
22) SR&ED consultants generally use contingency fees and assume risk. (If for whatever reason your SR&ED consultant is unable to recoup your development costs, there is not a dime that would come out of your pocket. This protects the client and motivates the consultant(s) to work diligently).
23) Consulting firms often package your personal/business taxes, business consulting, and other financial services as part of the SR&ED service. (Your company may find it convenient to combine financial services that include your SR&ED application preparation with one service provider. Some SR&ED consultants are able to provide you with a package deal that would ultimately reduce your SR&ED rate.
24) Empowerment through Education – Some tax credit firms that offer SR&ED services have a network of resources and offer training on how to market your business/product.
25) The program is confusing – over 70 documents, dozens of Tax Court of Canada decisions, unclear process (There are tons of documents to sift through to get a basic understanding of the SR&ED program.
26) Mobile: consultants usually travel to you for meetings (This is helpful if you are on time sensitive projects. SR&ED consultants usually make an effort to accommodate your schedule, and some even meet after business hours).
27) You can work remotely. (The convenience of completing tasks remotely is always a plus. Some SR&ED consultants have streamlined their process to allow them to work remotely. This includes Skype meetings, email exchanges, and general conference calls for operational purposes).
28) Proven track record on SR&ED claims (When selecting the right SR&ED consultants to work with you, make sure you verify their credentials. This includes testimonials and a proven track record for your industry/business niche).
29) Presentation and overview of the R&D program for your team. (SR&ED consultants will present the SR&ED program to your team so they are aware of the process. This can be done prior to completion of the work and is typically done during a pre-award meeting.
30) Identifying eligible expenses and the anticipated SR&ED dollar amount of reimbursement (In addition to identifying eligible SR&ED expenses, SR&ED consultants can prepare a projected estimate of the dollar value of your submission so you know the reimbursable amount you can receive in the form of a check).
31) Preparing tax forms to attach to your corporate tax return (SR&ED advisors will correspond with your tax advisor(s) and provide you with the appropriate tax forms. Some advisors will assist you in completing the correct fields when filing your corporate tax return. Other SR&ED firms file the return for you, they have the software and submit it to the CRA. )
32) Advice on the eligibility of your future projects. (It is beneficial to evaluate the potential for future projects before doing the R&D work. SR&ED consultants can help you structure your claim in an organized manner so that when it comes time to submit your SR&ED application, the process is streamlined and smooth).
33) Confidentiality Protection – Non-Disclosure Agreements (NDA). (It is common in the SR&ED industry for SR&ED consulting firms to sign a non-disclosure agreement to protect your intellectual property. Some firms even include a section in the service agreement that automatically protects clients.)
34) Make them aware of other tax credits, grants, and funding available to some businesses – other types of government assistance. (Some clients who take advantage of government incentive programs like SR&ED will also inquire about IRAP or other grants that will move them to the next stage of development. Be sure to inquire about other types of government assistance programs that are available. Remember, however, that if you receive government assistance, the dollar amount will be deducted from your SR&ED submission).
35) Smaller SR&ED consulting firms tend to invest more in relationships and provide a hands-on approach. (Larger consulting firms deal with a large number of clients on a daily basis. The perception of feeling like a number can be prevalent).
36) Milestone Meetings – Quarterly Reviews (Your SR&ED consulting firm can meet with you prior to SR&ED submission to help you effectively structure your claim and provide quality control in the preparation of your claim. This can be extended to your company at no additional cost and as part of the service provided to you).
37) Help find qualified projects that have failed (This is the one time of year when you can brag about your project failures. Failed R&D projects can definitely be claimed as part of SR&ED, so even if you were unable to overcome a technology hurdle; the associated costs can be included in your SR&ED claim).
38) Conduct a financial and technical review to ensure that no important factors are overlooked. (Quality control of both the financial and technical preparation will be performed prior to submission. This is done to ensure that there are no red flags and that the information presented is consistent with the SR&ED program criteria and your organization).
39) Be aware of government deadlines (Companies have been known to get so overwhelmed with product development and business operations that they forget about the government’s hard deadlines for SR&ED. Your SR&ED consultant will inform you in a timely manner so you don’t miss the deadline and lose a full year of development).
40) Process Improvement – achieved by streamlining SR&ED tax credit applications brings economic benefits to the entire industry. ( SR&ED consultants are also industry experts and know the efficient processes in the industry. Some consultants provide guidance and solutions to improve business processes).
41) Evaluating the eligibility of your projects prior to submission. (SR&ED consultants can meet with you to discuss your projects and determine eligibility. This can also be done via conference call with a lead developer or technical project manager).