A major piece of advice we regularly give to our clients is to get educated on the SR&ED program. More often than not, our clients respond by saying something like, “Isn’t that why we’ve hired you?” Our answer to that question is “Yes, however….”. “Yes” relates to the fact that MCN will handle the preparation and optimization of your SR&ED claim. The “however” relates to the optimization part of our services which among other things include educating client’s personnel on important aspects of the SR&ED program.
Client education is an integral part of our philosophy of treating the CRA as a customer (see our earlier post at http://www.mobilecapital.net/sred-advice-treat-the-cra-like-a-customer/).
Here are some areas where SR&ED education plays a vital role:
1. Empowering Employees – In our experience, empowering employees can lead to significant increases in SR&ED claims. One technique we employ to make this happen is our SR&ED seminars. These are 45-minute to 1-hour sessions, where an MCN consultant presents the objectives, benefits and basic criteria of the SR&ED program to client’s employees. Understanding the requirements of the program and seeing how the SR&ED program benefits the company, employees often feel more empowered and are more receptive to keeping notes, logs or other bits of information that can help during the SR&ED technical interviews. Another great benefit of having these SR&ED education sessions is that these sessions often lead to discovery of SR&ED eligible work that tends to be overlooked by employees and therefore is not discussed during technical interviews.
2. Audit Proofing – In rare cases when a SR&ED claim gets reviewed by the CRA, MCN consultants will always attend the CRA review. However, often the CRA reviewers will want to interview your personnel and probe their understanding of SR&ED program and work eligibility criteria. This is because the program is self-assessed. The CRA wants to know that your staff understands the program in order to ensure that the submitted work along with the allocated time/costs is eligible. The more you can say to demonstrate your understanding of the SR&ED program, the more comfortable the CRA reviewers will feel. Your understanding of SR&ED program reduces the chance of material error in your SR&ED claim (the reviewer’s major concern) and thereby ensures the successful approval of the claim. This is yet another reason why we encourage our clients to get educated.
3. Business Process Optimization – The SR&ED program requires that documentation helping to substantiate the claim be captured and kept in one form or another. This documentation may include contracts, email communication, source code/prototypes, time dockets, pictures etc. When employees and management learn more about the SR&ED program and appreciate the importance and financial implications of keeping the house in order, it becomes much easier to implement adjustments to business processes and procedures to capture SR&ED supporting documentation. Having employees on board makes it easier to adjust development approaches and manufacturing processes to ensure that the necessary SR&ED-relevant information is captured in real-time thereby greatly reducing the cost of compliance with the SR&ED program.
MCN offers a comprehensive and proactive approach to organizing SR&ED-related activities and claiming SR&ED tax credits. As a part of our standard SR&ED service, our consultants will be happy to meet with your organization throughout the year to help them understand more about the SR&ED program and optimize the processes and procedures to insure that each SR&ED-eligible activity is properly identified, documented and reflected in your SR&ED claim.
