More than ever, record-keeping is crucial when claiming R&D tax relief. Failing to document R&D activities properly may cause eligible costs to be overlooked or expenses to be reported inaccurately. This could lead to an undervalued claim or an enquiry from HMRC. And with a new claims process on the horizon, which requires a detailed breakdown of R&D costs for each project, keeping track of R&D activities is more crucial than ever.
At EmpowerRD, we know how difficult it can be to track resource allocation by R&D project. Nonetheless, timesheet records offer an effective solution for maintaining accurate R&D costs. In this article, we’ll explore the advantages of timesheet management and provide solutions to simplify timesheet management.
Understanding the New Additional Information Form
The new additional information form has significantly changed the R&D tax credit claims process. One essential requirement is a detailed breakdown of R&D costs allocated to each R&D project.
Previously, businesses were not required to split R&D costs by project, but now, tracking resource allocation by R&D project is crucial. Adapting to the new filing process expectations is essential to ensure a successful claim.
Enhanced focus on R&D projects and qualifying costs
HMRC’s increased scrutiny of R&D projects and their qualifying costs highlights the need for accurate time tracking and documentation. By tracking and documenting the time spent on R&D activities, businesses can provide concrete evidence of the resources invested in R&D. This level of detail ensures that all relevant hours are accounted for in the R&D tax relief claim.
Benefits of accounting software with timesheet management capabilities
Many of you are using accounting software to manage your business; some might even use it for timesheet management. And with the introduction of the Additional Information Form, it’s become even more important to keep a record accurately. If you’re claiming R&D tax relief, using accounting software with timesheet management capabilities is undoubtedly something to consider, as it can offer several advantages:
- Accurate Time Tracking: Timesheet features within accounting software enable businesses to track and record the time dedicated to R&D activities accurately. This ensures that eligible costs are appropriately allocated and accounted for, increasing the chances of optimising the R&D tax credit claim.
- Project-Specific Time Allocation: The new requirements of the Additional Information Form necessitate project-specific cost breakdowns. Accounting software with timesheet management capabilities allows businesses to allocate costs accurately to individual projects based on actual time spent. This level of granularity helps comply with the new requirements and provides a transparent breakdown of R&D costs.
- Comprehensive Reporting: Accounting software with timesheet management features enables businesses to generate comprehensive reports on R&D costs for each project. These reports satisfy the requirements of the Additional Information Form and provide valuable insights into project-specific expenditures and resource allocation. Such insights support strategic decision-making and optimise future R&D investments.
- Ensuring compliance: compliance with HMRC regulations is paramount when claiming R&D tax relief. Accounting software with timesheet management capabilities helps businesses maintain compliance by providing a robust and auditable system for tracking R&D time and costs. Detailed timesheet records can also serve as valuable evidence in case of additional questions from HRMC or an enquiry. It will also increase the claim’s credibility and reduce the risk of facing investigations or challenges.
- Streamline R&D claim prep and submission: Integrating timesheet management capabilities with accounting software streamlines the preparation and submission of R&D tax credit claims. By centralising timesheet data and incorporating it with financial information, businesses can efficiently compile the information quickly with an R&D tax specialist. This integration, alongside an R&D tax credit platform, eliminates manual data entry, reduces errors, and saves time and effort.
Top 4 accounting software for timesheet management
Here are four top accounting software with timesheet capabilities that can greatly benefit companies claiming R&D tax relief:
QuickBooks Time (formerly TSheets) is a user-friendly time-tracking software with robust timesheet management features. It provides several benefits for companies claiming R&D tax relief, including:
- Accurate Time Tracking: QuickBooks Time allows employees to accurately track their time spent on R&D activities. Employees can clock in and out, take breaks, change job codes, and add timesheet details with just one click. This ensures precise recording of R&D hours, crucial for R&D tax relief claims.
- Seamless Integration: QuickBooks Time seamlessly integrates with other accounting software, such as QuickBooks Online. This integration ensures seamless cost allocation and reporting for R&D projects. Employees can track expenses related to materials, equipment, subcontractors, and salaries and easily allocate them to individual R&D projects.
- Streamlined Reporting: QuickBooks Time simplifies generating project-specific cost breakdowns required for R&D tax relief claims. Its built-in reporting functionality provides real-time, interactive reports that allow businesses to analyse time spent on R&D activities, plan for payroll, and optimise project costs. These reports support accurate reporting and compliance with HMRC guidelines.
- Mobile App and Accessibility: QuickBooks Time offers a mobile app for Android and iOS devices, allowing employees to track, submit, and approve time from anywhere. This flexibility benefits companies with remote teams or employees working on-site on R&D projects. The app sends push notifications to remind employees to clock in and out, ensuring accurate time tracking.
- User-Friendly Interface: QuickBooks Time’s user-friendly interface makes it easy for employees to use the software effectively. With its intuitive design and simple navigation, employees can quickly record their time spent on R&D activities, making it a convenient solution for busy teams.
Xero Projects, an online project management tool, offers several benefits for companies claiming R&D tax relief. Here’s how Xero Projects can support companies in their R&D tax relief claims:
- Accurate Time Tracking: Xero Projects provides time tracking software that allows companies to record accurately and invoice hours spent on R&D projects. With the start-stop timer in the Xero Projects app, employees can easily track time on the go. They can log hours against tasks from their desktop or the app, ensuring every minute spent on a job is recorded.
- Seamless Integration with Accounting: Xero Projects is integrated with Xero’s accounting software. This integration ensures that project costs, including time tracked, are seamlessly added to invoices in Xero Projects. Companies can efficiently add employee time entries to payroll by integrating project timesheets with Xero Payroll.
- Project Monitoring and Invoicing: With Xero Projects, companies can effectively monitor their projects and track the profitability of each job. The desktop software or app allows businesses to see where time is being spent and if projects are running over budget. Using the time tracking software in Xero Projects, companies can create accurate invoices based on the time logged by their project team, whether they charge a fixed price or bill by the hour.
- Insights and Reporting: Xero Projects offers various reports to gain insights into time spent on projects. The Project Detailed Time report provides valuable information on the time allocated to specific projects, clients, or over a specific period. This report helps businesses analyse chargeable hours and make informed decisions. The Project Staff report gives an overview of staff time across all projects, enabling companies to monitor staff productivity and ensure targets for chargeable hours are met.
- Mobile App Accessibility: Xero Projects offers a mobile app for iOS and Android devices, allowing users to track time while moving. The app will enable users to conveniently add time entries, use the start-stop timer, or copy existing time entries. Tracking time anywhere enhances flexibility and accuracy in recording R&D hours.
Zoho Books provides efficient accounting software that lets businesses manage projects and track billable hours productively. With its time management feature, Zoho Books is an ideal option for accurately documenting R&D costs.
- Accurate Time Tracking: Zoho Books Projects enables companies to track billable hours effortlessly. Whether logging time daily or weekly or using the timer widget to clock time spent on projects, Zoho Books ensures precise tracking of billable minutes. This feature is crucial for accurately capturing R&D activities eligible for tax relief.
- Efficient Project Management: Zoho Books Projects allows companies to manage multiple projects effectively. By creating new projects, adding tasks, and assigning specific tasks to employees, businesses gain better control over their R&D projects. This organised project management system facilitates the identification and documentation of eligible R&D work for tax relief purposes.
- Enhanced Collaboration: Zoho Books provides role-based access control, allowing companies to collaborate with restricted access for project stakeholders. By customising user views and granting access to the timesheet module, collaborators can log time or use the timer. This feature fosters seamless collaboration and ensures accurate documentation of R&D efforts.
- Streamlined Expense Management: Zoho Books simplifies expense management for projects. Instead of billing expenses individually, Zoho Books allows companies to associate all project-related expenses during the billing process. This streamlines the expense documentation for R&D activities and ensures accurate cost allocation for tax relief purposes.
- Mobile Time Tracking: Employees can log project hours on the go with the Zoho Books mobile app. This feature is particularly beneficial for R&D teams that require travel or work remotely. By enabling mobile time tracking, Zoho Books Projects ensures no billable minutes are lost, providing accurate records for R&D tax relief claims.
Sage’s timesheet software enhances time management by prioritising and allocating R&D resources eligible for tax relief. Customisable insights and real-time project visibility facilitate accurate documentation and evaluation of R&D efforts, streamlining tax relief claims.
- Improved Time Management: Sage’s timesheet software helps businesses implement effective time management techniques, enabling teams to work smarter and faster. By tracking productivity, attendance, and performance, Sage assists in prioritising tasks and managing multiple demands, ensuring efficient use of time for R&D activities.
- Enhanced Project Visibility: With Sage’s timesheet software, companies gain real-time views of projects, allowing them to track progress and make informed decisions. By monitoring task management and allocating resources effectively, businesses can optimise project timelines and avoid overworking. This feature is vital for accurately documenting R&D efforts for tax relief purposes.
- Customisable Insights: Sage provides customisable reports that offer real-time views of attendance, productivity, and project statuses. These insights enable businesses to efficiently manage capacity, resources, and contracts efficiently, ensuring accurate documentation and evaluation of R&D work for tax relief claims.
- Accessible Anywhere: Sage’s timesheet software allows HR management on the go by providing access to data from anywhere, at any time. Reviewing leave and holiday requests, checking team availability, and empowering employees with self-service via the mobile app ensures seamless documentation of billable hours for R&D tax relief.
- Modular HR System: Sage offers a modular HR system with timesheet functionality, suitable for small and medium-sized businesses. With features like core HR, leave management, performance tracking, and timesheets, Sage simplifies HR processes across the employment journey. This modular design facilitates the integration of timesheet data with other HR functions, streamlining R&D documentation for tax relief claims.
If you’re looking for a comprehensive analysis of accounting software options for your business, look no further than G2. Their exhaustive research will ensure you find the perfect solution.
EmpowerRD’s accounting software Integration
At EmpowerRD, our Xero integration enables customers to connect their accounts efficiently and streamline their R&D tax relief claims. Through effective time management via your accounting software, our platform can speed up the cost-collection process and provide optimal results for clients.
In light of the new Additional Information Form, we have also adapted our platform to meet the evolving requirements set by HMRC. In anticipation of this change in August, we have updated our cost collection process to enable you to link your R&D costs to specific R&D projects easily. This critical update ensures that your claim complies with the new standards and is robust enough to meet HMRC’s expectations.
In conclusion, tracking resource allocation by R&D project is crucial for compliant and successful R&D tax relief claims. The new Additional Information Form emphasises the importance of accurate record-keeping and detailed cost breakdowns. Timesheet management, supported by accounting software, offers benefits such as accurate time tracking, project-specific cost allocation, comprehensive reporting, compliance, and streamlined claim preparation. Integrating timesheet management with accounting software simplifies the process, saves time, and ensures accuracy.