Tip #23 – Start with the documents

Start your R&D credit analysis by reviewing your documents since they contain most of the information you will need.

Being in a situation where you are ignored or disrespected isn’t fun. It negatively impacts your mental wellbeing, your attitude, and your interest in interacting with certain individuals. We not only feel ignored when people dismiss our verbal communication but when they dismiss our written communication as well.

CPAs routinely ignore engineers and other subject matter experts, (“SMEs”) when they fail to review documents at the beginning of an R&D credit analysis.

SPRX R&D Credit Tip – Start your R&D credit analysis by reviewing your documents since they contain most of the information you will need.

There’s a better way

Ignoring documentation at the beginning of the analysis is a bad habit formed back a few decades ago. Back in the 1990s when CPAs started analyzing R&D credits, most documentation hard-copy and not easily accessible. The only practical way to learn about research projects was to interview the project team.

From the project team perspective, these interviews are a tedious disruption to their day. I recall one of the first such interviews I conducted as a young staff accountant. I explained the qualification rules and asked the engineer if he thought his project would qualify. The engineer looked at me with all seriousness and asked, “if I tell you no will you go away and leave me alone”? The problem with this reaction is that it directly impacts the company’s ability to claim an accurate R&D credit.  

There’s a better way. A better way to get engineers and SMEs to cooperate. A better way to gather the necessary R&D credit information. A better way that reduces time and cost.

Go to the source

Today’s documentation contains most if not all the information necessary for an R&D credit analysis. Project lists, project descriptions, technical uncertainties, failures, challenges, testing procedures, test results, team members, contractors, etc. etc. are all documented and stored electronically today.

If documents contain all the information you need, and if the engineers and SMEs can torpedo your credit with non-cooperation, why not start with documents?

I acknowledge that there may be gaps or missing information in the documents. Interviews with engineers and SMEs may be necessary. However, the interview is much more positive when the engineer knows you have done your homework first by “listening” to written communication. With a more positive attitude engineers and SMEs will respond to your questions in more positive ways.

Technology makes it possible

Technology offers new options. Gathering and analyzing research documentation is a quick and easy as a few clicks of the button.

Powerful A.I. technology has been developed specifically to read, analyze, and score R&D credit information contained in any source document. The SPRX.tax suite contains the Document Extraction and Review tool (“DXR”) that conducts document analysis tasks in seconds.

With technology everyone wins.

At SPRX.tax we build the tools that save you time…and money