The client, a privately held technology company with 15 employees, assists businesses in migrating legacy code to new platforms, web enabling older software systems and handling other software transformation.
The very nature of the client’s services demands heavy investment in Research and Development to maintain competitiveness and a healthy bottom line. Despite being pivotal to strategy, investments in research can be onerous on short-term statements, especially for small and medium businesses. That is why the Research and Development Tax Credit has become so fundamental for this technology firm.
“It makes possible for us to do the kind of R&D that we wouldn’t be able to do without support,” says the company’s president.
This client has claimed R&D tax credit since its inception in 1995. Although experienced with the R&D tax credit program, the company chose to engage Braithwaite in 1999 to handle the financial, technical and taxation phases of the company’s R&D credit claims.
The client faced the challenge with two simple and effective solutions. First, it adopted an internal system to gather any relevant R&D data, including automated time sheets. The company was able to capture exact times spent in R&D activities and personnel involved in it.
Second, it decided to take advantage of Braithwaite’s technical services. The company outsourced the report production - interview with R&D personnel, preparation and writing - to a Braithwaite’s software claim expert.
Unlike some accounting firms and R&D tax credit advisory firms, Braithwaite offers leading technical, costing and taxation services. Technical specialists contribute to the preparation of claims as much as financial consultants. This two-tiered approach accounts for the company’s success rate of over 99 per cent.
Braithwaite’s technical consultants understand the ground rules and the types of activities that qualify for incentives. They have collectively worked on more than 10,000 claims and, therefore, they know exactly what auditors and reviewers are looking for when evaluating technical reports.
“It was a big step for our organization,” says the company’s president about outsourcing the technical report preparation to Braithwaite, “it saved us a lot of money.” He adds that the partnership with Braithwaite streamlined the R&D tax credit application, lowered costs related to the claim preparation, and made the whole process less resource intensive for the company’s staff.
With Braithwaite’s help, this small technology company claims on average $200,000 a year in Research and Development tax credit.