Full Service SR&ED Consultants vs
Year-End Filers

Many companies seeking SR&ED consultants to assist with obtaining research grants quickly realize there are three types of consultants, and their fees vary significantly. 

1. Accounting Firms
   These offer SR&ED services as part of their annual T2 filing.

2. Year-End Filers
   These work with companies for a short period at each year-end to write up the previous year's work as a T661 SR&ED filing.  These are not usually accountants but are documentation specialists who work with the client's accountant at year-end.

3. Full Service SR&ED Consultants
   These work with their clients throughout the year, suggesting projects, keeping documentation, and working with staff to ensure that data is recorded correctly and to the standards required by CRA.  Rather than being accountants, they are science and documentation experts who work with the client's accountant at year-end.

Let's talk a bit more about each group and their pros and cons.

Accounting Firms

Accounting firms are always involved in SR&ED filings at some level.  Usually, they simply accept the T661 science sections from an SR&ED consultant, but some firms have gone into the SR&ED consulting business themselves and will actually prepare the T661 at the end of the year.  

Pros: Accounting firms are usually highly professional and have an excellent understanding of the SR&ED program.  Furthermore, businesses have the advantage of working with a single firm on an SR&ED filing, rather than coordinating between a consultant and an accounting firm.

Cons: These firms will usually not work with the client throughout the year to suggest projects, ensure documentation is kept, and work with staff to ensure compliance.  As a result, year-end is often a bit of a scramble as documentation must be assembled retroactively rather than having been kept and reviewed throughout the year.  Business owners and managers need to be prepared for long review calls in which they are asked to answer questions about what they did ten or more months ago and why.  If documentation is found to be lacking, the entire year's SR&ED return may be at risk. Beyond that, these firms are held to very high standards of accountability so the level of documentation they require is often greater than that required by the other categories of SR&ED consultants. 

Price: For a simple preparation of an SR&ED filing at year-end, accounting firms will generally charge between 15-25% of whatever SR&ED credit was received, plus whatever they usually charge for the preparation of books and T2 filing (generally $3000 and up).  If a business hires an accounting firm to work with them through the year for their SR&ED claim, the firm will usually charge their standard hourly rate (generally $250/hour and up).

Year-End Filers

These consultants work with clients at year-end to prepare the T661 science sections for the client's accountant to file. 

Pros: Year-End Filers do not disturb a client throughout the year, so there is almost no impact on a client's core business operations.

Cons: These consultants will usually not work with the client throughout the year to suggest projects, ensure documentation is kept, and work with staff to ensure compliance.  As a result, year-end is often a bit of a scramble as documentation must be assembled retroactively rather than having been kept and reviewed throughout the year.  Business owners and managers need to be prepared for long review calls in which they are asked to answer questions about what they did ten or more months ago and why.  If documentation is found to be lacking, the entire year's SR&ED return may be at risk. 

Price: For a simple preparation of an SR&ED filing at year-end, accounting firms will generally charge between 15-25% of whatever SR&ED credit was received.  The business will still need to pay its accounting firm for the preparation of books and T2 filing. 

Full Service SR&ED Consultants

These consultants work with clients right from the beginning of the project at the concept stage, through getting a pre-claim consultation from CRA to ensure the project meets SR&ED criteria, then working with the business throughout the year to ensure documentation is kept to standards, and then finally working year-end to prepare the T661 science sections for the client's accountant to file. 

Pros: There is usually no scramble at year-end.  Documentation was kept throughout the year, so no questions need to be asked of the business owners and managers.  If a PCC (Pre Claim Consultation) was obtained, there is effectively no chance of being rejected.

Cons: These consultants generally charge more because they do more. 

Price: Full service SR&ED consultants will generally charge between 25-35% of whatever SR&ED credit was received.  The business will still need to pay its accounting firm for the preparation of books and T2 filing. 

In summary, while all aim for the same goal, these three types of SR&ED consultants meet distinct needs and offer varying levels of service.  If a business has the manpower and expertise to do its own scientific documentation and to design its own data collection mechanisms, it may well choose to save money by using a year-end filer or an accounting firm to assist with its SR&ED claim.  If a business doesn't have that manpower or expertise, it can still benefit greatly from the SR&ED program by using a full-service consultant.  It really depends on the resources each business has to allocate to its grant-money program.

How can you tell which category your consultant belongs to?  Don't just ask them which they are.  Almost all will say they're full-service.  Instead, ask them if they'll brainstorm with your team about ideas for SR&ED projects.  Ask them if they'll prepare a presentation for CRA to obtain a Pre Claim Consultation, which ensures you won't waste time on projects that don't qualify.  Ask them if they'll set up and attend Zoom meetings throughout the year to ensure everything is proceeding as planned, and to discuss new interventions and changes.   Ask them if they'll assemble and share documentation and collected data throughout the year, which they'll then share with the team, so there are no surprises at year-end.  Most importantly, ask them if they'll charge you extra for doing all of this.

Dymergent is a full-service SR&ED consultant that generally charges 25-30% and works with its clients from the brainstorming stage all the way through to filing a claim.  No money is exchanged unless success is achieved.  We'd love to hear from you about your ideas for a project.