Your R&D Consultant : Who works for who ?

A Quiz to find who works for whom ?

The SR & ED program is probably the area of ​​the Income Tax Act that is subject to the greatest amount of speculation, interpretation and dispute. The complexity of the field is so great that many rely on a consultant specializing in SR & ED tax credits.

But not all consultants are equal. How to distinguish those who help you from those who utilize you? Here is a short questionnaire full of relevant questions about your consultant. Each one raises a reflection on the value of the service rendered or the nature of your relationship with your consultant.

Use this questionnaire to re-evaluate your relationship with him. It can only be good for you.

1- Do you know what he does? or is it esoteric?

SR & ED is complex, so you need help. But this is not a reason to keep you in the dark. Take an interest in what he does, what are the steps involved. Ask each year for a short training on the important concepts applied to your file. After a few years with your consultant you should know what he is doing and how he is doing it. You should also know from which of your projects you can expect to find the most eligible activities. Many try to keep their work secret in order to keep you in the dark, in a dependent state. It is dangerous for you and the awakening can be brutal.

2- Is he always at the last minute?

We are talking here about consultants who do not give you any sign of life until a few weeks before the deadline of 6 months after your end of the fiscal year. This last-minute sprint can lead to errors, omissions, or delays in the production of your claim and the payment of refundable credits. In some years, your resources are not available. The consultant can deliver once at the last minute, maybe two, but not every year. Is this a sign that you are a less important client for your consultant? Wouldn’t it be more satisfying to send your tax return and SR & ED claim more quickly and, as a result, fund your repayments for a shorter period of time?

3- Who writes the descriptions?

We have seen several situations where a client writes his own descriptions which are reviewed and commented by the consultant. But the fees charged by the consultant are the same as for the clients who have their descriptions written-up by the consultant! It is abnormal to pay the full price for a review service as for a turnkey write-up service.

4- Does he inform you of the new documentation requirements?

The CRA’s documentation requirements have increased significantly in recent years. Did your consultant tell you about it? Did he help you set up a contemporary documentation mechanism for your activities (as opposed to only at the end of the year)? Have you heard about a registry of assumptions?

5- Have you had a technical audit in the last 3-4 years?

If no, are you aware that this is imminent? What does your consultant do to prepare your claim and yourself for this meeting? Does he insist on better documentation?

Another reason may be that your claim is consistently underclaimed. In this case you do not have to undergo the stress of an audit, but you claim less than what you are entitled to. Is that doing you a good service?

If you’ve been audited recently, how did it go? Have you been informed by your consultant about projects, activities or expenses that could be challenged and why? Did your consultant prepare you adequately? Did he defend you well? Did you get all the credits you claimed? Do you understand what was rejected and why? The following year was the SR & ED claim modified to reflect the CRA’s comments?

6- Does the same person do all your records (technical and accounting)?

The technical side is a specialty in itself where very few accountants who dare to go. But the accounting and tax side is also an area of ​​great specialization where no engineer should try his luck. It is not a question of knowing the right boxes on the tax form where to put the cost elements. It’s about knowing how to maximize results and make sure you do not forget about some accounting or tax matters.

7- Did you meet senior employees in the beginning, then always juniors, or new ones every year?

The quality of the resources involved in your file is essential. Several consultants use the technique of presenting a senior at the time of sale, but juniors during the fulfillment of the mandate. This is a rather unsavory sales approach because it hides the truth until after the proposal has been signed. In addition, if you are in this situation, you are entitled to complain and ask for according discounts. You do not have to pay for the training of your consultant’s juniors, especially if you sold seniors.

8- Did he explain how to use SR & ED credit to do business development?

The SR & ED tax credit is an advantage that you can leverage even more if you use it in your business development activities. Still, you have to know how to do it. If your consultant has not spoken to you about it, he is nothing more than a technical report preparer that drives you to underutilize the tools at your disposal.

9- Did he present you with other financing opportunities (IRAP, e-business, etc.)

Some preparers are SR & ED credit specialists. On the other hand, not all of your projects qualify for SR & ED. An better consultant needs to know how to identify other opportunities and present them to you when some of your projects might qualify. Have you heard about the e-business tax credit (e-business), the industrial design tax credit, the industrial research assistance program (IRAP), or any other hiring program? Some consultants prefer to omit this information to maximize SR & ED credits on which they are paid a percentage …

10- What is the mode of remuneration of the consultant?

Whether the agreement is contingent (% of the result) or fixed price, after 3-4 years you should ask yourself why you are still at the same rate. At the beginning of your relationship, the consultant must invest to understand your environment and your technologies. But, after 3-4 years, he has acquired this knowledge and he should make you share the savings that result. We are not talking about 50% savings but still a learning discount can be considered.

11- Have you requested alternative service proposals?

All service contracts have an end date. Even if some self-renew, after a certain time, there is always a moment when the contract is no longer valid. It is wise to ask for two or three competitor offers. It does not cost you anything, and you can check if you still have a competitive price on the market. This being said, it is not necessary to change supplier for 1% or 2% less. Simply discuss this with your consultant if you want to continue to benefit from his knowledge of your file.

Conclusion

After a few years, it is important to review your professional relationship with your R & D consultant. That does not mean that it is absolutely necessary to change it, but a review and an update of the agreement is always useful, even if it means verifying that is always in line with the market.

We are honored by your visit to our blog. R&D Action thanks you for that.

On the right of this page the index contains several other categories of practical and applicable solutions that are also intended for you.

Did you like your reading? Tell us so. What should be added? What topics are you interested in?

Did you dislike this reading? Tell us so. What did you like least about this text? How can we best meet your needs?