Time and expense tracking software for R&D projects

Tax credits on R&D projects constitute a significant financial source that contributes to the growth of your company. However, preparing credit application files often represents a time consuming and rather painful process both at administrative and organizational levels.

Are these issues familiar?

  • Permeability between different projects: how to log the actual time against the appropriate project? Most of the time, various R&D projects are carried out simultaneously and may be related to similar tasks. Therefore, unless you have a flexible tool to manage those projects, time recording may become unreliable and tedious.
    Create project templates in Abak360, duplicate them each and every time you launch a new R&D project, and assign employees to the project. Reliable data entries will be logged against the right project, by the appropriate resources. Quick and efficient!

  • Everyone can log time on a project according to one’s own method (task description for instance). Quite often employees will not log their time and related expenses on a day to day basis. In the absence of a systematic input method used by all, data entries may vary depending on individuals, their attendance, and their attention to details. Thus, the information might not be realistic, nor reliable.
    In Abak 360 create all the tasks and expenses types that you need. List those tasks and expenses types in your project, organize them in phases and sub phases. All employees assigned to the project will access the same list of tasks and expenses.

  • Correlating time/expense entries and documentation: tax credit applications require detailed documentation in regard to the projects and the time devoted to them. In most of cases, documents and receipts are not correlated with the time/expense tracking solution.
    Abak360 includes a powerful document management tool which allows storage of documents in electronic format for a given project. Centralizing all information on a R&D project including documentation will save you precious time.
  • Omissions and errors regarding hours and expenses logged on a R&D project are quite common.
    With Abak360 It is possible to limit the risk of errors and omissions by building phase based project architecture. Moreover automatic alerts will be triggered when a project has reached a problematic or critical situation (in regards to the budget for instance or on planned quantities). Abak360 will warn you when a project is drifting away from its boundaries.

  • Managing expenses for R&D project is quite often difficult. Are all the expenses planned, have they all been approved. Are the expenses assigned to the right project?
    Planning and budgeting your expenses is easy in Abak 360. Within your project tree you even can plan you expenses per phase and per sub-phase. Invoices and receipts (in electronic format) will be kept in the project file.

  • Preparing an application for a R&D tax credit requires a lot of time. Very often information is scattered throughout different files.
    Abak 360 standardizes and secures your project management process. Further, all the information related to the project is centralized onto one platform (time and expense entries, budget, report, documents, resources assignations, and notes on project). With Abak360, you spare a lot of time. No rush anymore to complete and send your application for tax return on time.

Project management and project cost management: two worlds.

Quite often when we speak about project management, we usually refer to the set of monitoring tools that are utilized to ensure that we shall deliver the project according to the three universal criteria:

• Deliver on time

• According to the specifications

• According to budget

It is rather simple to list the required specifications and to comply, and it is relatively easy (everything being kept in perspective of course) to plan the final delivery date for a project. However, it is more difficult to incorporate changes and contingencies that may arise during its execution. In general, project management tools used to manage these changes along the way allow limiting risks, at least on the organization point of view. It remains no less true that these changes have an impact on the financial component of the project.

Therefore, the concept of delivering ‘according to the defined budget’ becomes quite often uncertain.

The importance of billing method is obvious:

If we invoice the real number of hours and related expenses, then the situation is perfectly clear and there are no problems in sight. Whatever the changes involved in the life of the project might be, the billing will be done based on the real number of hours incurred in the performance of services and expenses. However unforeseen costs may occur after project delivery.

If we bill on a fixed fee basis, the following question will soon or later arise: what do we do if our flat rate billing does not reflect the reality on the ground? In other words, if we charge a lump sum which in equivalence is less than the selling value of the worked hours? Shall we post the difference in losses, or initiate a negotiation with the client? It will depend on the customer’s goodwill and on our negotiating skills.

Anyway, at this point we find ourselves still in the phase of delivery of services, but what about services rendered to customers beyond the delivery date of the project? Although these occur in retrospect, they were not initially budgeted, and as such they will affect the level of profitability of the project.

Let’s take an example:  we develop a software solution for the industry.

My project consists of three phases: needs analysis, development, commissioning. For the entire project I planned respectively 25, 100, and 50 hours for a total of 175 hours. My average hourly cost is $ 35 and my average hourly rate is $ 70. The agreement with the client is based on a lump sum of $ 14,000 (175 hours and a 25 hour buffer at the rate of $ 70).

I underestimated, in my analysis, development needs. In addition, the Beta version contained bugs that I had to fix. In total I spent 40 hours more than anticipated in my original budget (excluding the buffer). In compliance with the agreement I have  with the client I charged a flat fee of 200 hours and therefore have recorded a loss of 15 hours, representing $ 525  (cost). Software has been delivered. Two months later, the client informs me that there are recurring malfunctions and I have to work twenty hours to correct the situation. In total, although the project has been delivered I recorded a second loss equivalent to $ 700 (cost). To summarize:

Beyond project delivery, financial loss may occur. It is therefore appropriate to include in the budget a risk factor which ideally would represent the price of one year of service contract. In the example, besides the 25 hour buffer, it would have important to add an amount to cover the risk of post-delivery, for example 10 to 15% of the total contract value. Abak software specialist in time recording, billing and cost management of the project includes a component for budget calculation. Tell us about your projects, we will discuss your budget.