Beyond the Myth: The Surprising Truth About "Systematic" Investigations

Are you leaving money on the table because you think your R&D processes aren't "systematic" enough for SR&ED claims? You're not alone! Many businesses shy away from claiming SR&ED credits, fearing their methods don't meet the CRA's strict criteria. But what if you could earn more credits without drastically changing your approach?

The Truth About Systematic Investigations

The term "systematic" can sound intimidating, but it’s not as rigid as you might think. In reality, systematic investigations are relative and adaptable, tailored to your specific project needs, industry practices, and resources.

The CRA defines a systematic investigation or search as a process that includes the following steps:

1. Defining a Problem: Identifying the technological uncertainty you’re tackling.
2. Advancing a Hypothesis: Proposing a potential solution or explanation for that problem.
3. Planning and Testing: Experimenting or analyzing to test your hypothesis.
4. Developing Conclusions: Drawing logical conclusions based on your results.

Steps 3 and 4 are standard procedures that every company can follow easily. Step 1, defining the technological uncertainties, is relative and content-dependent. In this and future newsletters, we're focusing on step 2, advancing a hypothesis—it’s relative, too.

The Relative Nature of Systematic Investigation Methods

1. Knowledge and Expertise: Most companies use unstructured methods, like brainstorming, to generate hypotheses. These methods can still meet the CRA's criteria for a systematic investigation.
2. Resources and Constraints: Your available resources and project constraints shape your approach. Systematic doesn’t mean perfect—it means logical and repeatable within your context.
3. Project Complexity: Complex projects may need more elaborate approaches, while smaller projects can be more streamlined.
4. Industry Practices: What’s systematic in one industry may differ in another. Align your methods with industry standards and best practices.
5. Logical Progression: Your investigation should logically progress from one step to the next, based on your project's specific needs and objectives.
6. Documentation: Keep records that match the scale and complexity of your project. The level of detail should reflect your systematic approach.

Maximize Your SR&ED Credits

By understanding the relativity of systematic investigation methods, you can:

• Ensure your R&D processes align with CRA requirements.
• Avoid underclaiming credits due to misconceptions about systematic methods.
• Focus on driving innovation and growth in your business.

Don’t let the fear of not having a "perfect" hypothesis stop you from claiming SR&ED benefits. The CRA prioritizes testability and relevance, so your project may still qualify even if your hypothesis isn’t perfectly polished. This perspective opens up new opportunities to fund your R&D efforts and maximize your SR&ED claims. If unsure, consulting an SR&ED expert can help you navigate the process successfully.