The responsibility of hiring an SR&ED contractor is normally the responsibility of the CFO or, in smaller companies, the director. The majority of the time, candidates are chosen following the advice of a trusted person or business associate. However, you should think about what you expect in an SR&ED consultant as well as what benefit he or she might add to your business.
How much experience do you have?
You must avoid the big and the most successful ones for sure. When you’re good at something, you’re decent at nothing. The method differs based on the argument domain. It’s essential that the agent is familiar with existing and accepted market trends. He’ll see how the R&D practices, whether in manufacturing, software production, or research, go beyond this normal norm.
Inquire on how they handle the claim’s technological aspects. Can they have a good understanding of your technologies, and will they detect the risks and advancements? How would they classify the qualifying practices of your initiatives if they don’t have a clear grasp of the sophistication and nature of your advancement?
Ask for past clients
Second, seek customer referrals from the SR&ED company to check their background and competence. If the contractors refuse to provide you with references or claim that doing so would violate their client’s confidentiality, demand to see the agreement. To the prospective buyer, this could be a red flag. If the consultancy is reputable, there must be no excuse that the company cannot have references.
Who will be preparing the claim?
During initial discussions, this topic is often coming to the surface. When you’ve agreed on a contract and are now in the process of collecting detailed reports, it becomes more noticeable.
Inquire on who will be planning the argument. Is it a representative of the company’s employees or a third-party contractor?
In big organizations, it’s normal for the senior person you spoke with to not directly manage the claim; instead, a young employee with even less experience performs it. Under this case, it’s a smart idea to learn about internal quality assurance procedures so that you really can guarantee that all work is reviewed by a senior/more professional contractor before it is even sent out the door.
What are your fees based on?
SR&ED programs are highly advanced and nuanced. Inquire about the consultant’s payment system and timing: is it billed at the time of delivery? When you get the appraisal notice? when the credit checks are received?
For your consultant, this is a constant source of motivation. Is there a difference between reimbursable and non-refundable credits when calculating the percentage?
Other consultants need a deposit to begin and then when claiming the IRS. Are these payments refundable if the application is unsuccessful? Can these fees cover the money and time taken to defend against an audit? When you clear the payments before credits are obtained, the consultant’s participation and enthusiasm during the audit may be put into question. Some companies can bill more for extra sred auditing efforts.