SR&ED TAX CREDIT – HOW ARTIFICIAL INTELLIGENCE INCREASES COMPLIANCE – WHILE REDUCING INTERNAL COSTS
INCREASING SR&ED COMPLIANCE RELIES COMPLETELY ON EMPLOYEES CONDUCTING THE WORK – UNTIL A.I.
Creating support documents during the evolution of work is a critical part of an R&D Tax Credit claim. Without it, auditors are more likely than not to reject claims since the claimants cannot prove that their activities or time is directly related to SR&ED. Compliance does not stop at an eligible activity, rather the claimant must be able to fully support and prove their activities as the work progresses through documented work. This requires additional resources that many companies simply do not have or are unwilling to apply. The result is claim submissions with a lower compliance and a higher risk of rejection, and CRA Auditors are out in force. Many sources report a reduction of over $5 Billion in disbursements since 2010.
A.I. Assists Managers, Tracks Work flows, and Creates Support Documents
Rather than have a manager saddled with the responsibility to track all work and ensure employees are segregating and tracking their activities for SR&ED, an A.I. system can manage this task and reduce the load on internal employees. SHAIN is an example of an A.I. system that can communicate in natural language with teams and document their work for them at a fraction of the cost.
Pinpointing Obstacles and their Start Date by A.I.
One important requirement is to identify an eligible project as it begins and initiate tracking the workflow from the beginning. In order to do this, a manager or consultant must be able to recognize the eligible characteristics and initiate a tracking procedure. Otherwise, project expenses can be significantly reduced or can be missed all together. SHAIN is designed to track the team at a fraction of the cost of a human manager.
Tracking Hypothesis by A.I.
Once an SR&ED project starts, the ideas or hypotheses must be tracked and tested and the results must be measured and documented. This renders an R&D Tax Credit project compliant. Failing to chronologically track the hypotheses with test records renders projects inadmissible if caught by a CRA auditor.
Time-sheets by A.I.
The bulk of most SR&ED eligible expenses is commonly based on labor. A proper documentation of the team’s activities is the best method to capture labor expenses. However, this relies on the employees’ initiative and usually gets sidelined when other priorities emerge. SHAIN can assist employees by communicating with them and managing their hours.
Systematic Investigation Process by A.I.
The end result is that A.I. platforms can increase compliance among SR&ED teams by ensuring a systematic investigation process is followed. Accomplishing these tasks by an A.I. manager reduces the resulting load on and cost of human managers.
For more information on Automating SR&ED by A.I. Systems, visit SHAIN’s SR&ED
If you are an Accountant interested in exploring Partnership programs, visit SHAIN’s Partnership Programs for Accountants.
If you are an R&D Consultant interested in Partnership programs, visit SHAIN’s Partnership Programs for R&D Consultants.
CALL US: 1.844.823.2586