Converting Research & Development To “Return On Investment"

Accountant's Minute 264

Are companies giving sufficient priority to determining return on investment as part of the decision as to whether to proceed with a research and development project?  This will be the theme for the conversation between Peter Towers, Managing Director, ESS BIZTOOLS and Peter Milla, Managing Director, Business Tree Pty Ltd, an experienced innovation consultant, in the ESS BIZTOOLS’ Business Advisory Services Webinars/Conversation on Wednesday, 17th March 2021.

There are many questions that have to be considered by a company as part of formulating a research and development project, which include:

  • The identifying of an “idea” which has the potential of being turned into a realistic prototype.
  • Conducting appropriate searches to determine whether there is any prior art/literature.
  • Enquiring of experts as to their knowledge of any similar products that are available.
  • Implementing the Research and Development Product Package System to ensure that all of the information required by the Australian Taxation Office and AusIndustry is appropriately maintained.
  • Being very conscious of the need to protect intellectual property by having all participants sign appropriate Confidentiality Agreements and Assignment of Intellectual Property Agreements and maintaining sufficient information that a corporate decision can be made as to whether to apply for the registration of a patent for the intellectual property that has been developed.

But, there is another very important issue that many companies seem to ignore and that is what will be the “return on investment” of this outlay of shareholders’ funds which could have been expended on other projects?

Peter Milla believes that a full feasibility study should be prepared prior to a research and development project commencing and that the feasibility study should be submitted to the company’s Board of Directors as part of the application by management for permission to proceed with the research and development project.

What are your views?  Do you normally include the preparation of a feasibility study identifying a return on investment for a research and development project?

Want to know more?  Why not join us for what will be an interesting discussion on Wednesday, 17th March 20201 at 11.30am AEST (12.30pm AEDT). To register - click here.

Imminent Cessation of JobKeeper Highlights Challenges for Accountants

In last week’s ESS BIZTOOLS’ Business Advisory Services Webinar/Conversation, Priscilla Bea Smith, Director, Cloud Nine Associates Pty Ltd, had a discussion with Peter Towers about the various challenges that are facing SMEs and accountants as we approach the end of the JobKeeper Support Program.

Some of the suggestions that were made for accountants to offer proactive services to their clients to assist in navigating these challenges were:

  • Don’t forget the Australian Government’s 50% Guaranteed Loan of up to $1 million that businesses can apply for (see our later comments in relation to the government announcement on 11th March).
  • For some clients, capital raising as a Crowd Sourced Funding Equity Raising or Early Stage Innovation Company could be advisable.
  • For trades and manufacturing businesses, it’s a good idea to periodically review the basis for the determination of the charge out rates that have been used.
  • The question of how an accountant becomes accepted as the “trusted advisor” was also discussed. The responses submitted were:
  • Be proactive.
  • Act as if you were a medical doctor – ask questions on your client’s business beyond taxation issues.
  • Prescribe solutions to your client’s business problems, some of which you may be able to deliver business advisory services to assist them.
  • The best advice for some of the issues could be to refer your client to another expert and then act as a Project Manager to ensure that your client understands the advice that has been given to them and assist where possible in the implementation of that advice.
  • The ESS BIZTOOLS’ Research and Development Product Package was also reviewed. This package has been developed to assist small and medium-sized accounting firms to be able to offer professional advice to small businesses and medium-sized enterprises relative to the Australian government’s Research and Development Program which is delivered by the Australian Taxation Office and AusIndustry.

You can listen to the 30 minute conversation between Priscilla Bea Smith and Peter Towers by clicking here.

Research & Development Webinars

ESS BIZTOOLS is presenting a series of free webinars on research and development:

  • Tuesday 16th March at 11.00am AEST (12-noon AEDT). To register click here.
  • Thursday 25th March at 12-noon AEST (1.00pm AEDT). To register click here.
  • Tuesday 13th April at 2.00pm AEST. To register click here.

Government’s Post JobKeeper Announcements

On 11th March the Prime Minister announced the government’s Post JobKeeper Support Program.  We have prepared a summary of these announcements in the latest addition of the ESS BIZTOOLS’ newsletter that is produced for our subscribers to distribute to their clients and prospects.

You can access a complimentary copy of this edition of Business Plus by clicking here.

Upcoming Webinars

ESS BIZTOOLS’ free research and development webinars for accountants, business advisors and bookkeepers are being presented on:

Date

Title

Registration

Wednesday 24th March 2021 at 1.30pm AEST (2.30pm AEDT) - Mark Holton, Director, Smithink Pty Ltd

“Research & Development Can Assist Accountants To Differentiate Their Services”

https://essbiztools-au.zoom.us/webinar/register/WN_Ba9vOl6ZRZiE2ONGOryKtA

Wednesday 31st March 2021 at 11.30am AEST (12.30pm AEDT) - Matthew Karakoulakis, Principal Solicitor, AMK Law

“Legal Issues Relative to Research & Development”

https://essbiztools-au.zoom.us/webinar/register/WN_i6TDxAE1Q7mmt5zvaX4GBQ

Brad Smart’s Fourth Tip Of The Week (“Selling the Message”)

“If you’ve been writing blogs, articles or even been producing short informational videos to keep your accounting clients up-to-date, you may like to recycle them by creating an academy on your website.

Never heard of an academy? Well, digital marketing experts are telling us that academies are going to be the next big thing in marketing.

An academy is a repository of information on your website, where clients can learn about problems they may be facing.

As the name suggests, academies are training grounds for clients and potential clients to discover rudimentary information without promotional messages being forced down their throats.

It’s a form of soft-sell marketing.

The concept is that visitors can read about their issues along with potential solutions.

Of course, the basis solution is then branded with your company name and encourages them to seek further advice. Properly planned, an academy could be ideal for a medium sized accountancy practice.

Academies are also scalable. They continue to grow as you add material on a wider range of subjects.

Well-designed academies can drive users into a sales funnel, which pushes email offers and often, videos to enhance the sales experience.

If you’d like to discuss it, please give me a call – 0418 311011”.

Challenges Ahead

You are most welcome to visit our websites – www.essbiztools.com.au or www.essbizgrants.com.au where you can obtain information on government grants that are available for an individual client.

If you are interested in obtaining a free, no obligation overview of the Business Advisory Services Product Packages developed by ESS BIZTOOLS to assist accountants to deliver a wide range of Business Advisory Services without you having to reinvent the wheel by spending hundreds of hours in writing the material, please “Book A Demo” on the ESS BIZTOOLS homepage – www.essbiztools.com.au or contact Peter Towers:

Do You Want More?

To gain an overview of what is included in the ESS BIZTOOLS’ icon goldGold Package. Please contact us for further information.

To download free material click the link below:-

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Episode 264 - Converting Research & Development To “Return On Investment"

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Converting Research & Development To “Return On Investment"