Business owners are always trying to meet goals faster and take less risk in doing so. They want to become more competitive, grow faster, and be more profitable. And it’s your job to keep your client’s best interests in mind.
For manufacturing clients, one of the most popular ways to increase efficiency and cut costs is to utilize the R&D Tax Credit. But the intricacies of manufacturing processes can make it difficult to know exactly what qualifies for a tax credit. To take full advantage of the tax benefits and bring the most value to your clients, you may need some expert input.
R&D is Complex
Manufacturing represents about 70% of all R&D credits claimed. On the surface, it sounds fairly straightforward: if your client is developing or improving products and/or processes, they likely have qualifying credits. However, the devil is always in the details and what can and can’t be claimed differs across each industry niche.
To provide the most value for your client, start with the basics. Specifically, what type of manufacturer is your client? Are they a mold maker, metal fabricator, tool & die maker, plater, caster, or one of many other types of manufacturers? Next, do you know their manufacturing process from beginning to end and are you well-versed in their terminology, the equipment they use and and their best-practices?
What is your confidence level that you will ask all the right questions to ensure every eligible dollar of R&D credits is claimed? What about all the right questions to ask to ensure you don’t claim too many credits? What should you do if there’s an examination?
The Teaming Model
In situations like this, often the best way to serve clients is to surround yourself with trusted industry experts. It may be worth exploring the possibility of partnering with an R&D Tax Credit specialist.
Proven firms, in business a decade or more and with a good reputation, have industry practice leaders on staff with decades of hands-on experience. The most respected of these firms team their industry practice leaders with a top-notch CPA that has deep technical R&D expertise. In addition, they have proven step-by-step processes that yield the right results for the client.
Reputable R&D Tax Credit Specialists
Think of your R&D partner as an extension of you and your firm. Their reputation is your reputation. That’s why it’s critical to find a firm with complementary values. At a minimum, consider their ability to focus and get things done. Do they have high-integrity and always put the client’s needs ahead of their own? Are they friendly, collaborative, and easy to work with?
Reputable R&D providers have plenty of references to share, and you shouldn’t be worried about what you’re going to uncover during your due diligence. By teaming with an R&D specialist, you can stay focused on your core competencies and leverage outside expertise to advance the business interests of your clients.
