R&D costings are important!
Business Advisory Services Update
SMEs with turnovers from nil to $20million can obtain a cash refund equivalent to the R&D rebate if the company is trading at a loss.
The documentation that is required to be submitted to the government requires detailed costing information relating to the tasks that have been undertaken as part of the R&D project.
Key categories of expenditure include:
Team members: should complete a daily/weekly timesheet, which identifies the R&D project that they have worked on, with details of the activities that were conducted.
An administration person should calculate the labour cost for the individual team member who worked on an R&D project based on that person’s hourly pay rate.
Labour on cost should be charged to the project.
Consultants/Contractors: are engaged for many R&D projects. It is sound practice for the company to confirm the consulting/contracting work agreement and to document whether the consultant/contractor has any claim on the intellectual property that is being developed.
Consultants/contractors should be asked to submit tax invoices on a monthly basis, which clearly identify the individual R&D projects that they have worked on, showing the hours worked and their charge for those services.
It is a good management practice to ensure that your client is processing the R&D costs on a monthly basis, and that all of the supporting evidence is filed, so that it is available if it is required by government agencies.
ESS BIZTOOLS has developed a Research and Development Product Package, to assist accountants/bookkeepers to discuss R&D project costing records requirements to SME clients.
If you would like to discuss these requirements, contact us on 1800 232 088 or email .
