Australia is a country of wide temperature ranges, but mostly we expect and work in a hot climate. That means shipping temperature sensitive products is a challenge. Coolpac is a packaging company that is innovating in the space of temperature packing systems.
They have a research and development program that is focused on finding the best ways to keep products at a desired consistent temperature while shipping. Much of their innovation and new product development program is run under the AusIndustry R&D Tax Incentive scheme, giving them support to fund ongoing product research and development.
R&D Tax Incentive Compliance Concerns
Like many other companies Coolpac were concered that they might be flagged for a routine audit given that 1 in 4 claimants are expected to be audited.
While they felt that they had done their best to be compliant, there were a number of areas that they felt needed a review to be sure they would be prepared.
Coolpac approached SoftLogic Solutions with a view to doing a sanity check on their processes and record keeping making sure that they hadn’t overlooked anything.
Their particular questions were:
- Were there any deficiencies in their paperwork as it related to the R&D work to satisfy an audit with the Tax Office?
- Had anything changed in the compliance requirements since they originally started the R&D program that would mean making adjustments to current processes?
- Could they increase their claim through better and consistent record-keeping?
How we worked with Coolpac
After an initial discovery meeting with SoftLogic, Coolpac decided to engage with Softlogic in a workshop approach to review their work, and bring their R&D team members into the process of review, agreeing on processes and systems going forward.
While they had good processes in place, they had a turnover of staff that had inadvertently introduced some variance to their current program. This was particularly evident in the documentation that was not always consistent.
1 – Diagnostic Workshop
The first step was a team workshop which helped to identify the current approach and a better understanding for the team and what their responsibilities under the R&D tax scheme. This first step provided:
- A documented approach on the current process and records information flow
- An understanding of what the correct record keeping process should be, particularly as it relates to their business.
- Education for the team and then working together to determine the best way forward that would be efficient, practical, and meet the necessary compliance requirements.
- Identify areas where they could be claiming more, as the team came to better understand their IP and how it is defined under the R&D scheme.
2 – Gap Analysis Workshop
Following the first workshop, the team come together again to work through in detail their current processes. This helped them to:
- Create a detailed gap analysis with a report, which identified the product strategy, project planning, eligibility criteria, experiment planning and reporting
- Identify how to systemise the capture of these all-important documents into their everyday work program to make it practical and robust for continued compliance.
- Review current work to see whether it was compliant based on the new ‘approach’.
- Ensure any cost claims were tracked and supported as part of the agreed processes.
3 – Consistency Workshop
To embed the new processes and make sure they had continued consistency and adherence by all the team members, ongoing the following was developed as part of the final workshop.
- A R&D Business Process Manual was developed in consultation with the R&D Team so that they could benefit from the consistency a document process would bring
- A R&D Process Training across all areas of the business that need to adhere eg. product development, finance.
- A set of tailored R&D Templates to ensure the language and format was exact, each time a new document was created.
- Identified tools and automation to make the process robust and practical, on an ongoing basis.
- Complete confidence in their processes and the underpinning compliance for the R&D tax claims.
- A far more engaged and responsible team as they now have a much greater understanding of what is required and how to go about the work in a consistent way.
- A wide variety of time saving measures, while improving the quality of the record keeping, by agreeing on and putting in place templates for each step of the way.
- Identified additional claims because of the review and better understanding of their work as it relates to new IP and the R&D Tax incentive scheme.