What to Look for in a SR&ED Time Tracking Software
Why is SR&ED time tracking important? When CRA comes in for a project review, this is one of the first things they will request. Tracking hours using excel sheets or other informal approaches can lead to incomplete representations of the time spent on a project, leaving dollars on the table and you’re already under-claimed submission susceptible for criticism by the CRA appointed SR&ED project reviewer. Rather, implementing a SR&ED time tracking software coupled with the right process can cut down the guesswork and put your claim on solid footing.
There is a whole host of time tracking software built to track time and projects in general as well as other specialized software packages dedicated to solely tracking SR&ED activities. With all these types of SR&ED time tracking software out there what should you look for when selecting one that is right for you?
I am not going to beat around the bush here. If the SR&ED time tracking software you choose is not easy to use, your team will not use it. Having software that allows your team to keep track of time in the most efficient way possible is critical. This aspect should be the most important feature you look at when determining what tracking software you will use.
Your team members must be able to also write notes, comments as well as specific project updates. Having these comments tied to the time and date inserted into the software is also important. We will discuss this a later in this article.
Work these days rarely happens just 9 to 5 and only in the office. Having software that is accessible to your team members outside the office is important. This way any work completed off-hours or when your teammates are working from home can also be kept track of.
Projects often start with a small core of team members. As projects progress and activities surrounding the project grows, more team members may be added to during the life of the project. The SR&ED time tracking software you chose must be able to easily scale with the growth of your team.
This is one of the more important features to look at when looking at any SR&ED time tracking software. Reporting must be easy to use and easy to understand. With our own clients, we generally pair with an engineering lead to review all of the project hours and as a first pass, identify those that have the most hours while displaying characteristics of SR&ED eligibility. Without SR&ED time tracking software, this would be a difficult task to perform for all companies except for the smallest of teams. At a minimum, the reporting capability of your time tracking software should allow you to:
- Determine your claim amount by knowing how much time your team member spent on your SR&ED eligible project.
- Pull and collate project updates, progress and comments.
Most people have a natural dislike of having to report their hours, regardless of whatever software you choose. Regardless of which SR&ED time tracking software you use, if it is coupled with a timesheet submission process that’s too rigid, your engineers will abandon it. On the flip side, too light of a submission process and the reliability of the data becomes compromised. In our experience, we’ve found that weekly timesheets are sufficient for most engineers or software developers as they generally keep notes on what they worked on during the week and can adequately report the time spent on each task.
Moreover, assigning a manager to review that the hours have been submitted by team members on a bi-weekly basis is a prudent step, especially in the first 6 weeks of implementing a time-tracking process as early on, some of your engineers or developers will not yet have formed the habit of reporting their hours.
Finally, a quarterly, or in some warranted cases, monthly review with your SR&ED consultant and engineering leads should take place to discuss project eligibility on an on-going basis. For some clients, knowing early on in the fiscal year that a new project is likely eligible for the SR&ED tax credit can result in budgetary and hiring decisions for the associated engineering or development team. As discussed there are a host of software out there that will be able to be deployed across multiple organizations, projects and team. This guide will allow you to start determining which software will fit your needs.