Simplify Your SR&ED Claims with SystemX Tracking Software
In our previous blog post, we introduced the Scientific Research and Experimental Development (SR&ED) tax credit program and its benefits for software/IT consulting companies.
One critical aspect we didn't delve into was the importance of time tracking for SR&ED claims.
Since SR&ED compensates your business based on the costs incurred during eligible work, including payroll, you need a reliable way to track time spent on SR&ED-qualifying projects for each employee. Although many businesses submit SR&ED claims using estimates without proper time tracking, it's not advisable.
Though it may not seem necessary to have detailed time tracking initially, as evidence isn't submitted with your SR&ED claim, it becomes crucial if your claim is selected for review. In fact, time tracking is the first thing that the Canada Revenue Agency (CRA) will request when conducting a full SR&ED review.
To emphasize the importance of time tracking, here's a direct quote from a CRA SR&ED reviewer:
“Employees’ time (when and if applicable) should be substantiated with supporting evidence. The evidence should detail what activity each employee did for SR&ED and the number of hours spent on each activity. Timesheets that simply indicate “SR&ED work” or provide a similar description are not sufficient to support the work claimed… CRA recommends claims be supported by time logs detailing, on a regular basis, what activities were carried out by employees directly engaged in SR&ED. The hours need to be broken down by SR&ED activity within each project. Please ensure that SR&ED hours are segregated from non-SR&ED work carried out for each company project.”
This is where System X shines. Our comprehensive solution allows you to effortlessly track time spent on projects for all your employees, automating and strengthening your SR&ED claims.
Detailed Features of SystemX for SRED Qualification
Digital Timesheets: SystemX offers digital timesheets to accurately record and track your project hours. This feature provides the substantiation needed for your experimental development work claim.
Effortless Expense Tracking: SystemX simplifies SR&ED claims with its expense tracking feature, accurately documenting project-related costs such as materials, equipment, and subcontractor expense
Superior Documentation and Record Keeping: SystemX helps you maintain accurate and detailed records, a critical part of SRED qualification. Never lose track of important documents again.
Advanced Project Management: SystemX's project management features facilitate the demonstration of systematic investigation, a key requirement for SRED qualification.
To end things off
For more information on the SR&ED tax credit program, SR&ED Consulting companies like G6 Consulting can eliminate the hassle. SR&ED Consultants will prepare your claim, complete all the paperwork, submit your claim, and handle all post-submission administrative duties until your claim is approved, paid, and finalized. They also tend to work on contingency, meaning they only get paid after your claim is fully approved and paid out to you.