Capturing regular timesheets to substantiate R&D tax wage & and salary spending continues to be the single most important issue for R&D tax consultants in Australia. In many cases R&D tax claimants have no shortage of technical records to substantiate their eligibility and actual R&D activities but lack the basic evidence to confidently claim their wage and salary expenditure, which in many cases is the bulk of their R&D effort. R&D consultants feel powerless to communicate the importance of this simple but critical task, and increasingly are being left with no choice but to rule out wage & salary expense in the absence of timesheets or turn clients away to avoid regulator penalty.
Traditionally, R&D consultants provide clients with an Excel timesheet template towards the end of financial year to prepare for lodgement. While this may seem like a logical approach, especially in the absence of integrated R&D time-recording in client workflows, the underlying issue is the inefficiency and non-compliance of this "guesstimate" method. Here's why:
1. Your client’s struggle to substantiate the link between their time and R&D activities
When time isn't contemporaneously recorded (albeit the definition of "contemporaneous" may vary), recalling the amount exact time allocated to R&D and, consequently, the accurate wage expenditure becomes challenging. In the event of an audit, a generic Excel spreadsheet with a percentage allocation won't suffice. Concrete evidence of the connection between R&D activity, time spent the in R&D and wages associated is imperative.
2. Substantiating your client's R&D time is a time-consuming and costly task for your team
Your team likely expends valuable time sifting through numerous emails, files, and documents to identify evidence of R&D activity and time. This inefficiency and wasted time directly impact profit margins, rendering spreadsheet solutions costly.
3. Your clients are too busy
Even if clients commit to recording time throughout the year, the chaotic nature of operating a growing business often causes the R&D spreadsheet to fall off their radar. Because of this, you’re spending way too much time chasing clients or cramming everything every April, diverting your attention from writing R&D claims, and investing in your team.
Introducing Synnch Timesheets
To solve this problem, we have teamed up with some of Australia’s best R&D Consultants and RDTI claimants to create an exciting new industry-specific tool. Simply upload a claim, invite your client's team (or map payroll in Xero) and your client can start creating high-quality R&D tax timesheets in minutes. The tool allows you to complete comprehensive retrospective effort calculations, and in doing so, simultaneously set up the system for ongoing recordkeeping. With visibility over their wage & salary spend FYTD, and detailed forecasting, your clients will see the value of their efforts contemporaneously.
This secure standalone tool, accessible to all R&D claimants, is set to launch in early 2024.
Subscribe first to stay in the loop and receive demo invitations and updates on Synnch Timesheets. Catch sneak peeks of the product on LinkedIn. Synnch Timesheets—a solution to these challenges—is in the works.
