Many businesses believe they do not have enough documentation to file a claim. However, most of the time there is sufficient evidence to justify submitting a claim. It’s very likely there are some dated purchase orders, or dated contracts with customers to prove when the work occurred. We encourage our clients to setup an “SR&ED internal mailbox”. That way, during the year anyone can cc: this “SR&ED mailbox” which will record the SR&ED technical issue, along with a date stamp. Timesheets, samples, sketches or journals are also helpful to round out the story.
In the absence of documentation, you can make reasonable estimates based on the available evidence. From our experience, in the event of an on-site CRA review of the SR&ED claim, their primary objective is to verify that the work occurred and the expense claimed are reasonable. When explaining the claim to CRA, when the documentation can’t prove everything, a logical and reasonable rational for estimates is usually acceptable. Also, CRA likes to see that new claimants are on the road to compliance. We can help you implement a simple SR&ED tracking system, or help you tweak your existing system.