BLACK FRIDAY FEATURE ARTICLE: Lead SMEs Through the Innovation Journey
Accountants Minute 435
What if your client’s “small idea” becomes Australia’s next big innovation?
Every major breakthrough begins quietly.
A tradesperson frustrated with a slow job.
A warehouse worker rethinking a repetitive process.
A business owner imagining a simpler, smarter way to serve customers.
These moments spark the beginning of something powerful: new knowledge, new products, and new business growth.
And every time it happens, the same thing follows: They come to you – their accountant, their advisor, their most trusted source of commercial guidance.
Welcome to Stage One of the Innovation Journey, where great Australian ideas are born… and where proactive accountants gain an incredible opportunity to deliver high-value advisory services that change the future of the SME sector.
Innovation always begins the same way:
Someone sees a better way → they raise it with a supervisor → it reaches the owner → the owner remembers hearing something about “R&D Tax Incentives” → and then they ask you:
“Can we claim this?”
This is your moment.
Confirming R&D Eligibility (The Essentials)
Before prototypes, experiments, or testing begins, your client must meet a few simple requirements:
✅ Must be an Australian-registered company
✅ Must intend to spend over $20,000 in eligible R&D activities
✅ Must maintain systematic records from Day One
As an ESS BIZTOOLS subscriber, you have the templates, forms, checklists, and flowcharts needed to walk them through compliance — professionally and confidently — while becoming their “internal auditor” for innovation.
Step One: Is the Idea Truly “New Knowledge”?
Using ESS BIZTOOLS Flowchart FC050, you guide your client through the first major milestone:
Is this genuinely new — or has it been patented somewhere in the world?
Your client conducts Prior Art Searches through:
✅ Online research
✅ Specialist consultants
✅ Patent attorneys
If no patent exists → green light.
And importantly: no government registration is needed until after year-end.
Step Two: Identifying R&D Activities
Your client now documents:
✅ The Core R&D Activities
✅ The New Knowledge they intend to create
✅ The technical uncertainties
✅ The hypotheses they will test
Your expertise here is invaluable — you keep them on track, compliant, and audit-ready.
Step Three: Plan → Budget → Approve
If the idea stacks up, it’s time for structure:
✅ R&D Plan
✅ R&D Project Budget
✅ Board Report (even for one-director companies)
ESS BIZTOOLS makes this effortless with ready-made tools and templates.
The Opportunity is Huge – and Growing
In 2022/23:
✅ 6000+ SMEs (turnover < $10M) claimed the R&D Tax Offset
✅ ~1000 medium-to-large companies also participated
✅ SMEs represented 46% of all R&D registrants
Stage One sets the foundation. But once the board approves…
This is the busiest stage — and the stage where accountants add the most value.
1. Review Prior Art: Ensure documentation is complete and retained for six years.
2. Decide: Patent or Trade Secret? Your client needs to determine their IP strategy — now, not later.
3. Build the R&D Team: Every person involved must sign:
✅ Employment agreements with IP assignment clauses
✅ Confidentiality agreements
✅ Contractor agreements
4. Set Up R&D Project Codes: No codes = no claim. ESS BIZTOOLS shows you how to structure this correctly.
5. Daily/Weekly Activity Records: If it’s not recorded, it didn’t happen — and won’t be claimable.
6. Monthly Management Reporting: Transparent, accurate, audit-ready summaries.
7. Evidence of “Systematic Progression of Work”: Your client must demonstrate real scientific method — you help them stay compliant.
8. Annual Governance Statement: Signed by the authorised officer.
9. R&D Cost Summary: The numbers that drive the eventual claim.
Claiming the R&D Tax Offset
For SMEs with turnover of under $20M.
Offset = Eligible R&D Expenditure × (25% tax rate + 18%) = 43%
If the company is in a loss position → cash refund option available.
If profitable → tax payable reduces.
Many SMEs receive refunds within 30 days.
And often… innovation is born.
Your client innovates.
You ensure compliance.
ESS BIZTOOLS provides the structure that makes you indispensable.
A working prototype exists — but this is not the finish line.
It is the gateway to commercialisation, grant funding, scaling, IP protection, and new revenue streams.
What Happens Next?
Your client must decide:
✅ What will they do with the prototype?
✅ Do they have funding for commercialisation?
The Industry Growth Program (IGP)
A major government initiative offering:
✅ Advisory support
✅ Matched grant funding
✅ Technical guidance
For early-stage and advanced commercialisation projects within National Reconstruction Fund priority sectors.
Grants range from $50,000 to $5M.
ESS BIZTOOLS includes a complete guide (Paper 014-146).
Refining the Prototype
Testing → improving → strengthening → validating.
Industry Focus Group Testing
Insights and feedback that shape the final product.
Intellectual Property Protection
Patents, trademarks, trade secrets, designs, copyrights — ESS BIZTOOLS outlines all the pathways.
Patent Options
✅ Standard Patent (20 years)
✅ Innovation Patent (8 years — fast, SME-friendly)
You now help transform innovation into a sustainable, scalable business model.
BLACK FRIDAY SUPER DEAL — 75% OFF UNTIL 5 DECEMBER
Everything you need to guide clients through Stages One – Four is inside the three main ESS BIZTOOLS product packages — now available at massive discounts:
EXPLORE ESS BIZTOOLS AND SUBSCRIBE HERE
The Innovation Wave Is Here — And Your Firm Can Lead It
SMEs are creating more new products, new technologies, and new processes than ever before.
With ESS BIZTOOLS, your firm becomes that partner. And the value you deliver becomes impossible to ignore.
Visit our website – www.essbiztools.com.au – to discover the detailed overview of the services provided by ESS BIZTOOLS. You are also welcome to contact us on 0418 190 181 or email .
Free Webinar by ESS BIZTOOLS
BLACK FRIDAY FEATURE WEBINAR
Innovation Journey: Helping SMEs Create, Grow, and Prosper
📅 Monday 1 December | 11am AEST
Empower Tradies with an Effective Pricing System
📅 Thursday 4 December | 11am AEST
Guiding SMEs to Success Through Business Planning
📅 Thursday 11 December | 11am AEST
Smart Succession Planning for SMEs
📅 Thursday 18 December | 11am AEST
Want to know more?
Visit www.essbiztools.com.au.
If you would like to have a discussion about how this concept of virtual CFO services can be supplied by Australian accounting firms please ring our Managing Director, Peter Towers, on 0418 190 181 and we will arrange a complimentary 45-minute Zoom meeting to discuss your firm’s position and to give you our advice.
We believe that this is the blueprint for the delivery of an enhanced range of services by Australian Accounting and Bookkeeping firms to assist SME businesses to add value to their businesses and to assist accountants and bookkeepers not only to attract but to retain outstanding talent who want to be involved in the delivery of “real accounting services”.
Tell us what you think
We would like to ensure that our articles remain relevant, insightful and informative. We value your input, so it would be appreciated if you could take a few minutes of your time to complete our survey – click here.
Thank you for your assistance in making Accountants Minute better.
Subscribe to Accountants Minute
Want to keep up to date with the latest issue of our Accountants Minute newsletter?
Click here to subscribe, free of charge.
