How To Set An R&D Budget
Start as you mean to go on
You’ve got some amazing plans for a brand new, highly creative R&D project - but how are you meant to budget for them? Our top tips can help.
1. Understand where your market is headed
R&D is the perfect chance to understand the marketplace in which your business operates and competes. It’s also an opportunity to not only see where the marketplace is right now, but where it’s likely to go in the next one to five years based on observed trends. This analysis will also provide a broader view around what is happening to core technologies and what new technologies are having an impact in the marketplace.
2. Consider sources of funding
The way a company funds its growth will change over time as new and more valuable funding sources become available. Furthermore, the budgeting process itself is also likely to change as it takes advantage of new technologies or increases market share with new, next-generation products. This is why it’s so important to know what public R&D funding there is available, both local, nationally and across Europe. At Myriad Associates (the name behind the Tax Cloud portal) we have years of experience in identifying the perfect R&D funding opportunities for your business - get in touch.
3. Know your capabilities
In order to design an efficient budget plan, you need to fully appreciate your company’s resources, abilities and limitations. Over-estimating what you’ve got available can seriously damage how well you can complete a project whilst meeting revenue and profit targets. However under-estimating can mean you use your resources less efficiently.
We’ve known some companies to undertake 6-monthly or yearly audits of their R&D capabilities and this is something we’d recommend. It’s an excellent tool in planning what to tackle next and what budget you’ve got to hand. If you then find that human resourcing and/or financing is going to be tight, you may then wish to outsource your R&D instead.
4. Devise good forecasting models
Forecasting models aren’t a silver bullet and they definitely have their strengths and weaknesses. Projections that cover the next few months, even with the effects of coronavirus, may be fairly reliable, but events beyond that are tricky to predict. However, a good way forward is to link R&D to revenue growth. Expenditure on R&D activities rarely happens in just one fiscal year alone, as it’s likely to be at least a couple of years before a product can finally be manufactured. By dividing up the R&D budget into product-related investment streams, it’s easier to identify the link between R&D spend and revenue growth - which is much simpler to model.
5. Bring in the experts
All R&D budgets will need to be revisited over time and refined where necessary. It’s therefore important involve the team directly responsible for R&D spend so they can outline their views. They are, after all, on the ‘front line’ of your R&D project and will be able to offer the greatest insight into their budgetary requirements. This information can then form the foundation of a database that keeps track of resources, models, spending and capability, allowing managers to continuously fine tune the budget as the project moves forward.
6. Speaking of experts…
Talk to us!
At Myriad Associates (the name behind the Tax Cloud) we specialise in all aspects of R&D funding for businesses across both Ireland and the UK. Our team consists of a range of R&D specialists, advisors and accountants who can talk you through all aspects of funding your innovative new ideas from start to finish. We can go through the many grant funding opportunities to find the ones that suit, before guiding you through the application process. Plus, if R&D Tax Credits are on the cards, we can also identify which areas of your R&D project will attract this lucrative tax incentive, and help you achieve the R&D funding your business deserves.
But can’t I just apply for R&D Tax Credits and grants myself?
Yes, you can. But it’s not straightforward and success is far from guaranteed.
For starters, the rules and guidelines are often changing, particularly around the types of projects and costs that can be claimed for. Apportioning relevant costs is also tricky, and it’s easy to make a mistake. Plus, we’ve seen many companies leave eligible expenditure off their claim, simply because they didn’t know it would count. This in turn has led to some companies literally missing out on thousands of pounds, just because they didn’t take the appropriate R&D funding advice. Don’t let that be you.
And what’s so great about the Tax Cloud portal?
Tax Cloud is an online portal that gives Irish businesses the opportunity to prepare their own R&D Tax Credits claim just like a pro. Not only do you know your claim will be fully optimised, but you’ll pay less than you would for traditional consultancy services too.
It's free to use - simply sign up and verify your details. Then once you've described your R&D activities and added your costs, Myriad’s specialist team will review everything and provide any feedback if needed.
Next, Tax Cloud takes all the details and costs you’ve entered and devises your R&D tax claim report. Myriad will submit this on your behalf to Revenue Commissioners, and if they come back with any enquiries we’ll deal with those too.
Hassle-free peace of mind for you.
How is the Tax Cloud such good value?
When you use the Tax Cloud to make your R&D Tax Credits claim, the fees you pay are guaranteed to be lower. This is because you do all the data entry yourself, so it’s ideal for smaller companies or those with fairly straight forward tax affairs. Plus of course Tax Cloud offers 24/7 online access, so you can work through your claim whenever and wherever you want.
Get in touch
We’re proud of the positive impact the Tax Cloud portal has on our clients. We see the different the resulting cash can make - and we’re ready to work with you too.
- Submitting R&D tax claims since 2017
- Strong track record delivering R&D tax credit claims
- Over €10m claimed and counting
- Industry leading specialists
- We employ technical, costing and tax experts
- Confident of delivering value to our clients, we offer our R&D tax services on a success fee-only basis.
Meet some of the team behind Tax Cloud