We occasionally come across stories of a poor experience with the SR&ED program, especially the disastrous results that can occur on a site review carried out by CRA on an SR&ED claim.

Recently, a manufacturing company approached RDP and shared their experience.  Historically, the company had claimed $75,000 per year in SR&ED tax credits.  Each year they received a Notice of Assessment that their claim was accepted as filed; however, no review or examination of the SR&ED claim was made by CRA for those years.

They then received a letter from CRA requesting that CRA come on site to review the SR&ED claim they recently submitted. The company incorrectly assumed the scheduled CRA site review was just a formality.

At the site review, CRA requested a significant amount of documentation to support their claim.  The company was able to provide some documents on the functionality of the new product being developed.  They also had an undated document that did reference some technical issues but for the most part this document  discussed  the commercial aspects of  the product.  There were some emails but the client could only retrieve a few of them and even then it was difficult to cross reference the SR&ED work done.  There were also some notes on testing and trial runs but again it was difficult to reference this to a time line.  There were materials consumed in trials but no record of the outcomes.  Some time sheets were kept by one quarter of the technical staff but the time sheets did not indicate what the staff worked on or any technical obstacles they encountered.

Unfortunately, CRA can no longer accept claims that are not supported through contemporaneous documentation and in this case, CRA could not find enough documentation to support the claim and rejected the claim outright. The company was so frustrated with the outcome, they gave up on the program and lost out on SR&ED tax credits for future claims as well.

While CRA appears to be increasing its frequency for SR&ED claim site reviews, our experience has shown that proper preparation is the key to a positive outcome.  It all starts with implementing a system that is:

• Easy to use
• Makes users accountable
• Is tied into  the company’s strategy to develop superior products / processes
• Helps to create a culture of professionalism and pride in their achievements

RDP has successfully implemented systems with these objectives in mind.  The result is that companies view the process in a positive light, in addition to maximizing their funding each year.

When claims are well-supported through site reviews, the positive results extend beyond the year in review.  The likelihood of CRA holding site reviews in future years is significantly reduced.

CRA reviews are a certainty at some point for every claimant.  Talk to RDP today about putting in a system to ensure your CRA site review turns out right.

If you have any questions, please feel free to contact Brian Cookson at 416-313-2971 or email bcookson@rdpassociates.com.  To speak to our Documentation Specialist, please contact Susan Mattice at 416-368-9341 x507 or email smattice@rdpassociates.com.

www.rdpassociates.com | www.cycleofsuccess.ca

www.rdpassociates.com | www.cycleofsuccess.ca

RDP Associates Inc. has a history and reputation of working with companies to maximize their returns from government incentive programs. We specialize in helping our clients maximize SR&ED and Digital Media Tax credits. We also keep track of Government grant programs that may benefit our client base and provide financing opportunities for them. The following is a new program that may be useful to some companies:

The Digital Technology Adoption Pilot Program (DTAPP) provides grants of up to $99,999 to businesses towards the selection and implementation of digital technology.

DTAPP is designed to speed up the rate at which SMEs in Canada adopt complex digital technologies — for example, inventory or supply chain systems, computer-aided design and sensor networks — and build digital skills. An important component of this pilot program is the assessment and measurement of the outcomes of digital technology adoption on the productivity of SMEs. DTAPP will utilize this aggregate knowledge and transfer successful practices and lessons learned to the broader SME community in order to:

• improve the rate of digital technology adoption by SMEs
• improve their understanding of the link between digital technologies and productivity
• raise awareness of the benefits and importance of adopting these technologies

To be eligible businesses must be incorporated in Canada and have less than 500 employees. Eligible costs include consultant fees related to technology selection and implementation as well as associated employee costs i.e. training. The program will not fund digital technology capital costs, i.e. digital technology hardware, software and equipment.

The maximum DTAPP contribution is 75% of eligible costs. However, actually awarded amounts have been considerably less. Moreover, local program representatives are typically limited to awarding one DTAPP grant in their area.

Please call or email us if you have any questions regarding this program or any other government assistance programs.  You can contact either Brian Cookson at (416) 313-2971 or email bcookson@rdpassociates.com or Arne Luik at (416) 313-2973 or email aluik@rdpassociates.com.

The Work Has To Be Leading Edge Technology

Companies do NOT need to be developing or creating leading edge technology. In fact, if companies can “re-create the wheel” with any of its products, solutions, or internal processes, it is likely that an R&D claim can be made. If a company does not have access to the proprietary knowledge necessary to develop the new product or process and must embark on a project on their own, the Company is most likely carrying out qualifying R&D activities.   

For example, if a given competitor of a company develops a new mechanism to adjust the level of an office chair and the company elects to develop one of its own, this competitor obviously will not share the concept and methodology as to how the mechanism was developed. As a result, a company wanting to develop its own would have to undertake a development project. If this project otherwise meets the definition of R&D (see below), there is no reason a claim can not be made.

The Work Has To Be Innovative

This is a common misconception. Innovation is not a criterion for determining if a project is eligible. The criteria are technological advancement, technological uncertainty and technological content or systematic investigation. It is how a company developed the product or process that is important not what a given company has developed. Innovation may certainly be a key indicator that R&D has been done but a company must assess the project against the criteria. This criterion separates routine development / engineering from a qualifying R&D project.

For example, a software company wishes to develop a system that allows users to access stock information real time. At the present time, the company can handle 500 users and the response time is 2 seconds. The company needs to scale to 20,000 users and the response time needs to be less than one second. What is important here is the scalability / response performance target that creates a technological uncertainty and not the fact that the software can supply stock information to the users.

Companies Can Figure Out on Their Own What Qualifies for R&D Tax Relief

When I first started working in the area of R&D tax credits, over 25 years ago, I thought companies could read the rules and determine for themselves what projects qualify as R&D. In about a year, I quickly learned this was not the case. While at first glance the rules seem straight forward, most companies have great difficulty in interpreting eligible activities based on the qualifications mentioned in the BIS guidelines and how to apply the rules to their specific situation or industry. Often, what a company does every day is R&D but to the company it appears routine.

In addition, companies are often under the misconception of having to be leading edge or very innovative. We estimate that companies trying to determine what projects are eligible, on their own, miss out on at least 30%-50% of eligible projects and activities.

If Companies Do Not Keep Time Sheets They Can Not Make an R&D Tax Credit Claim

Time sheets are important if they are kept by a company but Revenue does not require a company to track time to claim R&D tax relief.  In fact, most time recording systems do not effectively pick up eligible R&D time. More important than time sheets are documents that support the R&D being done such as dated minutes of logs.  With this documentation in place, solid estimates of time spent on R&D can be readily determined. Good time tracking systems permit one key individual who understands the eligibility rules fully to check the allocations on regular basis to ensure they are accurate.

We advocate a real time system that identifies, captures and documents R&D as it occurs. Our Innovation Connection Program does just that.

Service Companies Like Architects and Sectors Like Farming Do Not Qualify for R&D Tax Credits 

See below for a partial list of work done by architects, as well as areas of farming that have been claimed as R&D tax relief. This will give you an idea of how wide the scope of industries is that are eligible for R&D tax credits.

FARMING

• Hybridization or development of new strains of crops, plants, or livestock
• Implementation of precision farming techniques in attempt to increase yield and/or production efficiency
• Experimentation with new or different fertilizers (organic etc.)
• Development/implementation of new ways to protect crops from disease
• Development and implementation of new irrigation systems
• Evaluation and implementation of new techniques to increase yields
• Attempts to develop or implement new cultivation techniques
• Development of new disease resistant crops or livestock
• Development of new ways to prevent or control disease or insect pests
• Improvements in harvesting techniques
• Implementation of new equipment to improve harvest cycle times
• Development or experimentation with new feeds or feeding techniques for livestock
• Development and experimentation with new breeding techniques
• Development of new gene transfer technologies
• Efforts to optimize treatment and management of farm wastes in an energy efficient manner
• Development and/or implementation of automated processes
• Development of an innovative product or process
• Design and implementation of biosecurity practices: facility cleaning and disinfection

ARCHITECTURE

Examples of  Activities that could Indicate an R&D Project Include the Following:

• Developing unique energy efficient features
• Developing schematic designs  and developing new building or architectural techniques.
• Developing planning and elevation drawings
• Designing a functional site plan to incorporate or overcome the site plan features
• Developing construction documents
• Designing and developing building facades
• LEED certification
• Designing building systems
• Designing site orientations
• Designing building shape and form

Some Specific R&D Projects we have Claimed are as Follows:

• Innovative roof configuration
• Development of green technologies for an agricultural operation
• Residential pre-fabricated systems for low budget assembly type acoustically rich buildings
• Ecologic housing developments
• Integration of active and passive renewable energy technologies
• Passive energy systems for an educational institution

For additional information, please contact A.K. Hajee at (0)203 002 0089 or by email at ahajee@rdpassociates.com

There has actually been a lot going on with the SR&ED program over the past 2 years, both technically and administratively.

In the 2012 federal budget, the SR&ED program funding was substantially reduced. The cuts were  to be re-allocated to direct R&D funding or grants. This was a result of the Jenkins report which studied the SR&ED program and Innovation in Canada. It concluded the SR&ED program funding had escalated to a pay out that did not justify the ROI. The  current government agrees with this conclusion and recommended approach.

The recent 2013 federal budget on the one hand brought in some measures whereby CRA will assist first time claimants and others with their claims. On the other hand it would appear that the government is very concerned about abuse in the program. Additional information on the SR&ED forms will now be required concerning who is actually preparing the SR&ED information and  to what extent. Penalties and other charges may be imposed if the correct information is not provided. Further, if CRA believes abuse or negligence has occurred, civil or criminal charges will be laid to deal with tax fraud or abuse.

These changes are a further reflection on how CRA has been administering the program over the past 2 years. Any company who has been through a site review recently knows that CRA is taking a much more stringent and tougher approach to SR&ED claims. Some  Research Technical Advisors  (RTAs) have focused on the criteria in a more narrow view of what qualifies while documentation, or lack thereof, has become a favourite method for CRA to reduce and even completely deny claims.

The definition of what constitutes SR&ED has been in force and virtually unchanged since 1985. Intentionally, it is  a subjective definition so as to permit all types of SR&ED in all types of industries.  CRA also has tremendous latitude to set or move a goal line as to what is routine and what meets the criteria. Companies and CRA will always wrestle with that subjectivity. However, CRA’s current position on documentation is misleading. What the courts accept and what is outlined on CRA’s website is not what is happening in the site reviews.  I have not, since 1985, seen one company who truly keeps the copious documentation that RTA’s are now requesting companies to keep. On their own, companies simply will not keep this level of documentation if it is solely for the purpose of the SR&ED program.

All this is to say that the SR&ED program may be an incentive program but the incentive you are applying for is somewhat at the whim of CRA.  In other words when you file a SR&ED claim, CRA is now very skeptical and cynical. If they believe you have over-claimed, you will have to provide detailed documentation on a level most companies do not maintain. What might be even more concerning is to what extent CRA will impose abuse or fraud charges if stated documentation is not available?

So what do you do? It’s simple, RDP can help you document real-time. There is no question the SR&ED program remains cost beneficial on any financial analysis you might consider.  Your best defense is a well-supported claim. Based on site reviews and meetings with CRA, RDP has developed what documentation needs to be retained and what does not. Our program takes the pain away.

Contact Susan Mattice, our Documentation Specialist, today to find out how this no-cost service can help you improve your documentation to support your claim in this new climate (smattice@rdpassociates.com or 416-368-9341 x507)

We have received your responses relating to the question we posed, “What is the Largest Business Issue Which Your Company is Facing?”  We have combined these results with earlier surveys and have provided a list of the Top 10 Business Issues below.

If you are truly interested in tackling your largest business issue, one that will significantly improve the bottom line if properly addressed, then we ask you to take the COSi challenge.

By spending just one hour a week over 4-6 weeks, RDP will take you through a proven approach to solving your business issue that will have an immediate, positive bottom line result. This process is one that will start you on a path to solving any business problem.

Our commitment: If your bottom line does not increase due to a result of actions taken under the COSi method, then no fees are payable.

The top 10 Business Issues

Sales

• Lack of sales force
• Lack of formal sales process
• No new ideas on how to sell
• Lack of outbound sales efforts and waiting for the phone to ring
• Poor use of website, no Search Engine Optimization or social networking
• No measurable goals for sales people
• Handling objections
• No sales staff sharing best practices

Quality Control

• Lack of quality control system
• Not fully understanding specs or plans before starting to make or build
• Errors on paperwork
• Rework, not getting it correct the first time and no rework or error accountability
• Scrap rates too high
• Waste
•  Set up times

Standard Operating Procedures&Automating Procedures

• Lack of written formal procedures
• Inconsistency in following current written procedures
• Gaining efficiencies by automating labour intensive work flow processes

Scheduling and Delivery of Service/Product

• Changes are last minute
• On time delivery
• Wasted time as materials are not delivered on time
• Schedule changes
• Lack of schedules

Human Resources

• How to motivate staff
• What are the best incentive packages?
• How to bring in the best candidates to hire
• How to create and increase employee engagement
• How to make the workplace more fun

Estimating/Bidding

• No project budgets
• Budget to actual
• Measuring budget to actual during projects
• Inconsistent pricing methods

Cash Flow – Operational Reporting

• A/R collection issues
• Not tracking lost time or lost productivity
• Lack of employee incentives
• Cash flow problems
• No KPI’s

Project Management

• Inefficiencies such as a lack of tracking for scope changes
• No project budgets
• Better project management
• Decision- makers in the field doing work outside of contract
• Overtime on projects

Communication

• Communication top down
• Better departmental communication within shop/office
• Lack of clear roles and responsibilities
• Lack of delegation from the top

Lack of innovation

• Fear of change
• Employee morale poor
• Autocratic and dictatorial owners who maintain the status quo

To learn more about the process, please contact Brian Cookson at (0) 203 004 8303 or email bcookson@rdpassociates.com.

www.rdpassociates.com | www.innovationnpd.com

We would like to take this time to wish you all a healthy and prosperous New Year, and to say thank you.

We value your business and have been listening as you give us feedback.  Based on that feedback, we have made some improvements to serve you better.  We think they will translate to increasing your claim size, quickening the receipt of your SR&ED refund and protecting your claim in the event of a CRA review.  We think you’ll like these improvements!

Condensed Claim Preparation – We know that sometimes preparing the claim tends to drag on so we’ve implemented the option of a new condensed schedule whereby we develop a two-week schedule with pre-booked technical meetings. Our technical and financial associates will work with you to gather the necessary information and complete the claim all within this schedule.  Not only are we hoping this makes the process easier for you, it will help more of our clients file their claim along with their corporate T2.

Client Communication – In an effort to keep you up to date on how the claim is progressing towards submission, we developed an enhanced client communications strategy.  This involves a regular status report.  You tell us how often you want to receive it; frequency can be increased the closer we get to the deadline.  It will update you on where your claim sits in the development process, the next steps and whether or not it is on schedule.  We’ve piloted this with a few clients and so far we’ve been getting great feedback.  We’re excited about rolling this out to more clients.  We think it will really help speed the process and again, make it easier for you.

Documentation – You’ve heard us say how important contemporaneous documentation is for supporting your claim and CRA is driving this home even more with some of their new policy documents. Through our Innovation Connection Program, we will help create systems, give you templates and meet with you periodically throughout the year to assist with and review your documentation to better meet CRA’s requirements.  We have already started rolling out this program and have seen good results with respect to better supported claims; faster claim development after the year has ended and even helped to find more SR&ED eligible work.

We are happy to talk to you about implementing any of the above programs, and look forward to another successful SR&ED year.  In the meantime, please keep feedback coming; both positive and negative! Feel free to contact me, your technical associate or send confidential feedback to: feedback@rdpassociates.com.

Brian Cookson

The term accountability is used quite often when managing people.  Every organization has to deal with it and many managers wrestle to find an answer.

Here is a very common statement:

“I lead a team of five people in an IT company. I consistently seem to butt my head against the same thing.  We make plans, decide who’s going to do what, but then consistently fall short – miss deadlines a bit here or there. The result is that we seem to keep lowering the bar, ever so slightly.  What can I do to increase the accountability on our team?

When the above happens everyone involved is disappointed and frustrated.  Variations on this issue involve:

1. Staff leaving on vacation without getting their work done that then unexpectedly falls onto other staff less familiar with what needs to be done.
2. Monthly targets are met every other month so that no real progress is made.
3. Excuses such as lack of customer/client communication or commitment prevented the work from being completed.

The answer, as is usually the case, is having a process:

Set Accountability Appointments

Set up accountability appointments to follow up on status of work.  For fear of being considered a micro-manager, many leaders go too far in their delegation of tasks, and once something is delegated, often wipe it completely off their minds or to-do lists.  The key is to circle back around with the person delegated the task, by setting up an accountability appointment to make sure the job is complete.  You’ll be amazed how much gets done.

Create More Team Versus Individual Goals

When everyone has their eye on the same prize, it’s amazing how a little peer pressure from your colleagues will force you into action.  Team versus individual accountability is a powerful thing.  Set shared targets so that it is in your team’s best interest to both support each other in the achievement of a task, as well as hold each other accountable when necessary.

Involve the Employee in Setting the Goals

When employees have a hand in setting their own goals they are more likely to achieve them.  Of course they need to be aligned with company objectives but the more employees are involved in setting goals for themselves the more committed they become.  This creates a sense of ownership and a feeling of engagement.

Have Pre-set Consequences for Lack of Accountability

In the first instance of failure to meet a deadline ask some probing questions to find out more and raise the bar on performance:

• How do you want me to hold you accountable?
• You said you were going to take this action, and you did not.  What is your plan now?  In the future, what would need to happen to ensure the task is completed on time?
• What is the impact on others of you missing this deadline?

At this meeting, re-iterate the company’s written policy (that ultimately should be part of the job description).  A good written policy will set out the consequences if deadlines are missed including when and what circumstances will trigger the action and exactly what the action will be (less autonomy, fewer high profile projects, no bonus, demotion, termination).  Having these pre-set consequences leaves no misunderstanding as to what actions will take place.  It sets minimum acceptable standards within the company that makes the decision in effect automatic.

If you are interested in learning more or obtaining some templates or checklists on improving this process within your organization, please feel free to contact Brian Cookson at (416) 313-2971 or by email to bcookson@rdpassociates.com.

RDP has a full innovative system to grow and manage your business.  Talk to us today about how this proven system can benefit your company’s bottom line.

www.rdpassociates.com | www.innovationnpd.com

Over the years I have talked with several executives who have shared with me that they are working increasingly hard to grow their business as well as increase profitability but fail to get the results they desire. That does not surprise me.

Many companies are often in a dilemma. How much time do they need to spend working “on” their business as opposed to working “in” their business? Working “in” your business is performing tasks to sell, develop, manufacture and deliver your product or service. Working “on” your business relates to tasks like developing sales and marketing strategies and improving systems within the company.

Businesses spend approximately 95% of their time working “in” their business as opposed to 5% of their time working “on” their business. While I am not going to debate the merits of moving these targets one way or the other, if you are going to spend only 5% of your time working on your business, then my suggestion is that you had better make this time efficient and effective.

Most business owners find it difficult, or say they don’t have the time, to work on their business, and therefore don’t usually give it the attention it deserves. I have found that one of the main reasons is that they don’t have a system or format to follow. Consequently, they are unable to resolve challenges and take advantage of an upcoming opportunity resulting in no to slow growth.

In this article, I am going to take a look at 3 techniques that any business can follow that will have an immediate impact on solving problems that will improve their bottom line.

1.  Quantitative and Structured Brainstorming, and Business Flow Mapping

Brainstorming is a concept that has been around a long time. The key though is to have a systematic approach that quantifies the financial impact of ideas you develop. Here are some practical steps to brainstorming.

Form a Team

Assemble a cross functional team of 6-8 staff in your boardroom. The team should be from all areas of the business, and at varying levels (junior to senior staff). You want input from all areas and facets of your business. You will be surprised and delighted by what you will learn.

Let the Ideas Flow

When gathering ideas, give each person the opportunity to state their ideas to the group, without any debate or criticism of individuals or the ideas raised. Continue until the group comes up with as many ideas as possible. This can be done over 2 one-hour sessions. Participants learn from each other and reflect back on their thoughts to come up with very insightful ideas in the subsequent sessions.

Map the Business Flow

Next, map out the business process from how you attract business to when you receive payment for your goods or services. The group can use any format it wishes but all participants should contribute and be able to see the flow chart. Don’t make this too detailed and circle 3 areas within the business workflow for improvement and add this to your list of ideas.

Categorize and Quantify

Boil down the ideas to 20 by grouping “like” ideas. Determine the impact each idea will have on the bottom line if implemented. This is where your accountant can really help. Consider all impacts solving the problem will have on the bottom line; such as increase in sales, improved productivity, costs savings, shorter time to market and reduced waste. Rank these ideas from largest to smallest affect on profit. In my experience I have learned that 2-3 one hour sessions done over different days yield the best results

You now have a clear path of 20 ranked and quantified ideas to move forward with to improving your business growth and profits.

2.   Taking an Idea from Inception to Implementation Using a Team Approach

Identifying top ideas is not enough. In fact, most companies are generally good at coming up with ideas. However, the initial energy and enthusiasm is lost in the day to day urgencies. It is imperative to build a structure that ensures that ideas are taken from inception to fruition in a time bound manner. In an era when top down management is failing, one of the best ways to ensure ideas are implemented is to engage employees using a team approach to solve a problem or implement an idea into practice. Such approach enhances employee engagement and improves the company culture to become more collaborative. Once again, you want a systematic and practical method of accomplishing effective implementation. Here are some steps you may want to consider.

Cross-functional Team

Select a team of 6-8. The team should include those directly related to the idea and one or two staff not directly related to the problem but who can provide fresh insight. Select a team leader and a scribe. The team will meet one hour a week for 4 weeks and no longer than 6 weeks.

Identify Root Causes and Develop Standard Operating Procedures

Spend the first one hour performing root cause analysis. Do not skip this step. Determine what is preventing the idea, problem or opportunities from being resolved or implemented. Record this list of detracting root causes and order them in terms of importance. The next week work on solutions to the problems. Here you can use the brainstorming technique above and also call in an expert to offer some solutions as well. In the last weeks, the group will prepare Standard Operating Procedures (SOPs). Use a template here to assist you that address the most important areas such as problem definition, root cause analysis, solutions considered, important decision criteria, and proposed new operational procedures. The SOP should also set out the objective, detailed procedural steps to be carried out, targets and metrics to be achieved, and a conclusion. After each week, the team leader can report back to management on the status and ensure management concurs with the progress.

Roll Out Solution

Once the standard operating procedures are complete, the team leader will promote the SOP throughout the company and maintain metrics to ensure targets are met.

A few words about SOPs. They are extremely important. If you don’t believe it, look at McDonald’s. You may not like their food but you know exactly what you are going to get in every McDonald’s store right down to a clean washroom. Also, SOP’s are not static. Once the action team writes the initial SOP, the team leader must stick with it and re-calibrate the steps in the SOP. As the SOP is being implemented and you receive feedback, you will need to fine-tune the procedures.

3.   Building KPI Dashboards and Financial Metrics that Really Provide Management with the Right Information to make the Right Decisions

This is another area where the process is dynamic. If designed and implemented correctly, KPI’s and metrics can guide, motivate, direct, and focus. At the same time a poorly designed metrics can rather confuse, de-motivate, stagnate and stall creativity.

Therefore, I recommend some key guidelines before establishing metrics and KPI’s.

• Pertinent – does it really add value to the manager(s)?
• Specific – is it detailed enough that it holds the particular manager accountable for the performance of the process measured?
• Timely – when actually received by the manager(s), is it current enough to make decisions with?
• Accurate – are there ever any errors in the reporting?  Can a manager rely on the information?

Generally companies track only financial metrics. This poses some serious limitations, and in today’s times financial metrics alone are not sufficient. We need to include customer measures, internal measures, and learning and growth measures to enable management in tracking company performance in a more holistic way. Ask yourself the following question and you will be able to identify other important non-financial areas of your business that you must consider to expand your view of metrics.

Customer Measures

Customer measures are about designing metrics to measure customer satisfaction. Some important questions to consider are:

• How have our objectives reflected our customers’ acceptance of our price/value relationship?
• In what ways do our customers understand the value they are getting?
• What do we need to know about our customer’s business?

Internal Measures

Internal measures will help you track the efficiency of your internal processes at a company wide scale. Some important questions to consider are:

• How reliable are our sales forecasts?
• How can we streamline our proposal and contract approval process?
• What sales tools are we providing our sales force to maximize effectiveness?

Learning and Growth Measures

Learning and growth measures are designed to ensure that a company is not only competitive in current times, but will also be sustainable and profitable in the future. Some important questions to consider are:

• How well do we know that we are building a company that is well-positioned for the future?
• How are we going about avoiding “trial and error” approaches for creating success?
• How do we know that we are creating an environment that will attract the kind of people we want?

Financial Measures

Financial Measures, of course, continue to be important, and here are some good questions to think when designing financial based metrics.

• How risky is our present composition of clients?
• How well do we assess our investment in the existing sales force?
• How do we know we are growing in a profitable manner?

In conclusion, apply these simple yet powerful techniques in your business and transform your profitability as well as culture.

Author Bio:

Brian Cookson has been passionate about business innovation and new product development since 1982. He runs his own innovation consulting practice, RDP Associates Inc. (www.innovationnpd.com) that specialises in helping companies develop their own in-house processes to improve corporate culture and profits. Please email bcookson@rdpassociates.com if you have any questions or suggestions.

While many companies are aware of the R&D tax relief programme, surveys have concluded that at best only 25% of eligible companies are currently claiming.

This statistic is unfortunate as the benefit of claiming is very much significant.  Based on the total claims submitted in 2010, the average small/medium size business that qualified for the programme earned tax savings/refunds of £36,000.  In addition, the majority of companies in the programme make R&D tax relief claims every year.

When considering your Company to claim R&D tax relief, RDP would like you to consider “The Six P’s”.

The Six P’s

1. Are we developing a new or improved Product?
2. Are we developing a new or improved Process?
3. Do we develop Prototypes, bespoke equipment solutions or create software/IT developments?
4. Do we file for Patents?
5. Do we hire Professional engineers or hard science professionals?
6. Did we have technical Problems in developing products or processes?

If the answer is yes to any of the above questions, then there is a strong likelihood your Company qualifies for the R&D tax relief programme.  The key here is to realize that most claims are submitted under the development or “D” side of R&D.  So we are referring to the “shop floor“ developments or improvements instead of traditional basic or applied research activities involving flasks and beakers.

Summary

To ascertain whether your Company could be eligible, we suggest the following:

1. If you can answer yes to any of the 6 P’s, you will be able to start the process of making an R&D claim.  For certain companies like manufacturers (of any product), software developers, food and beverage, digital media, plastics or chemicals, there is over a 90% chance you will qualify, based on our experience.
2. Contact RDP for a free assessment. Generally, within 15 minutes, we can provide a rough estimate of the cost/benefit of making a claim.
3. Keep in mind that over 85% of our clients who make R&D claims make a claim each and every year.  If you look at the cash impact over time of receiving this assistance each year, you would hard pressed to come up with valid excuses not to make a claim.
4. Starting April 2012, the effective benefit of making a claim is roughly 25% of the gross spend.  This means that up to 25% of your R&D costs can be rewarded as a refund or used to offset your corporate taxes payable.  Qualifying costs include employee salaries (direct and indirect), sub-contractor costs, materials consumed, software licenses purchased and specific overhead.  We have many SME’s claiming over £40,000 per year.

For more information on a free R&D assessment consultation to determine your Company’s eligibility, please contact A.K. Hajee at (0) 203 002 0089 or ahajee@rdpassociates.com

www.rdpassociates.com | www.innovationnpd.com