Manage R&D Tax Incentives Proactively to Save Time and Frustration: the Three Ts


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Manage R&D Tax Incentives Proactively to Save Time and Frustration: the Three Ts

September 15, 2020

Jonathan Forman, Managing Director, R&D Tax Credit Services

30-Second Summary:

  • Claiming R&D tax incentives is a familiar process in most jurisdictions, but it’s also flawed.
  • By working proactively, we can improve the process with the 3 Ts: technology, training, and tracking.

Claiming R&D tax incentives is a familiar process in most jurisdictions:

  • Recognize you may be eligible for benefits
  • Contact your local CPA or boutique R&D tax firm to help you
  • Tax/accounting engages in a project to try to capture R&D activities from the past – in many cases in the U.S. from the past 7+ years
  • Pay said CPA or boutique a significant portion of your benefit for assisting you

It’s great work for service providers and they have been profiting greatly from this model for decades. But is it the best way to handle this?

There are a few flaws in this process:

  • The tax/accounting function may not recognize that eligible work is taking place, and certainly not the complete scope of eligible work going back several years
  • The firm you engage only knows so much about the organization.  They can only claim what they ask about or are told about
  • People’s memories are a funny thing – they’re generally quite bad – and remembering what you had for breakfast last week is sometimes a challenge, let alone project specifics from three years ago
  • Herding the cats at year-end can be a challenging, time consuming, thankless job that doesn’t always yield great results
  • Oh, and it’s generally very expensive

How can we improve the process?

The best way to improve the process is to start working proactively instead of retroactively. This is especially true for large complex organizations. There are three Ts needed for success:

  • Technology
  • Training
  • Tracking

Let’s look at each.


Technology is a game changer. When it comes to managing the R&D incentive process, you can dip your toes in the shallow end, or dive right into the deep end. Either way, you’ll see improvement. By selecting the right technology tools and incorporating your company’s development process into the tool you can take a monumental step towards contemporaneous identification of eligible costs. With contemporaneous identification comes significant savings in time and effort later on.


Ensure those implementing the technology solution in #1 have an understanding of qualified activities. Next, ensure company personnel have an understanding of the technology being implemented. By making sure the first part is taken care of, the second part becomes much easier.  It’s easier to train five or six people than it is to train five or six hundred. In other words, if your development process is properly integrated into a real-time technology tool, the tracking should almost take care of itself. That leads to #3.


A properly implemented technology solution should include contemporaneous tracking of eligible costs. It’s essential that tracking is monitored an a regular basis to ensure the system is (a) setup properly to capture all eligible activities, and (b) being used by company personnel as designed. Think of it as a more functional time tracking system where the decision about eligibility is not made by the user, but by the back-end. The system must be monitored on a regular basis and reviewed on a regular schedule. If implemented properly, the end result will be simply running a report for the tax team at year-end.

For large companies tracking multiple departments and thousands of employees, implementing a system as described can and will save an immense amount of effort (and money) annually. You’ll be able to more accurately account for all eligible costs, and importantly, be able to respond to requests from auditors, tax authorities, and your CFO in a painless, efficient manner.

Global Tax Management (GTM) can help you determine your R&D tax credit opportunities, and help you navigate other tax challenges in the ever-changing and complex landscape we live in today. Learn about our R&D Tax Credits Services here. For more information, please contact me at

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