Choosing an R&D tax credit software is not as easy as you think. There are a lot of factors to consider before you decide on which tools to use. But how can you make the right decision and choose the best software?
There are two different ways how to calculate R&D tax credits. The first is called Regular Research Credit, which compares your current R&D expenses with historic R&D expenses – how much you have spent over the years on R&D and how much you have earned from it. The second one is the Alternative Simplified Credit. Here, you compare your current expenses to the last three years of company expenses.
You might find the world of the R&D tax credit confusing, especially if you are new to the industry. There may be things that are still blurry to you, and that is why it makes sense to use tax credit software.
Why do you need an R&D tax credit software?
In general, tax credit software is there to make business owners understand R&D and make processes simple. With such software in place, companies that qualify for the tax credit can get the assistance they need. Do you want to calculate how much credit you could get? Just use the software, and you will get the answers related to R&D in just a few clicks.
How to choose an R&D tax credit software
Whether you are looking to invest in a new platform or replace your current software, here are six things that should help you in the software buying process.
1. How much does the software cost?
Pricing is vital in any business decision, but you should not take just this as the only factor you consider. Basing your judgment on price alone will not help you get the most value. After all, a price does not always translate to quality.
In general, buying whatever is more expensive because it has a long list of features may not always be the best move. Start with a basic budget – how much are you willing to spend on tax credit software? You can then decide on the attributes you want the tax credit software to have. Doing this will help you better understand the value of such software.
And if you are considering software at the lower end of your budget, be careful of those that will not last long. Think about what the software will be like in the next five or ten years. You might find that the cheaper ones become more expensive than the other software options.
2. Will the software company fix bugs?
As with other software, an R&D tax credit software will have bugs, too. When it is time to buy one, you must be aware of the procedures of the software company for fixing bugs. Anticipate what issues you could run into and find out how you can address them with their help. Check whether the company will solve issues that are unique to how you use the software and not just the big problems most users experience.
3. How often does the software company push updates?
You will know when a software company is decent if they continually update their product. The R&D tax credit is not easy to crack, so you need to talk to software vendors regarding the details – how often do they push updates? If their service or product isn’t available due to product updates, it could affect your use of the software.
4. Can you customize the software enough to meet your needs?
Customization is always attractive. One of the reasons why many iOS users have switched to Android is because of customization issues. Users like it when they can configure the settings to how they need them. A highly customizable R&D tax credit software might be just what you need!
However, too much room for customization can be a problem, too. Users may find it too complex of a system and difficult to adopt. The same goes for a less customizable software system, as it can be harder to modify according to what the company needs.
At the end of the day, you need to weigh both to determine which one works for you the best.
5. What support does the software company offer?
Software support also plays a huge part in whether getting an R&D tax credit software is a win for your business. If your IT team is not that big and the software is a little complicated, it may cause problems. In this situation, you will need the help of the software support team.
Pay attention to the support hours for the software vendors you are considering getting. Are they available 24/7? If not, how available are they? What level of convenience can their support team offer?
And speaking of support, you must check how you can contact them. Is the support team only available via e-mail? Or can you reach them by phone? Do you need to submit a ticket for them to assist you? If so, how soon can you get a response from them?
Your software company’s support team must be available when you need them. Otherwise, it could affect the productivity of you and your team.
6. What kind of security does the software company offer?
How they collect, secure, store, and share information is crucial if you want to get an R&D tax credit software. Company data should not be accessible to the public and must remain secure. Always review the security page of the software provider you are considering buying.
You may also want to work with a lawyer or compliance officer to review the security documents before agreeing to the terms and signing the contract. Compliance regulations vary depending on the product use case and the industry.
When choosing an R&D tax credit software, always put the company’s needs on top of your priority. The software should help make your jobs easier. Hopefully, the tips mentioned above were able to help evaluate the software options you are considering getting. The goal is to choose the software that’s best for your business.
Open Business Council offers resources, Trade Finance, business advice, SME Finance and a forum and directory for businesses! Improve your business and use the best digital, financial and funding tools to grow ROI – return on investment and ROA – return on attention!