Guest post by entrepreneur accountant Stuart Reynolds. Stuart spends his time working with Australian founders to fast-track their growth through better cashflow at Fullstack Advisory. Having worked with likes of projects from Shark Tank, A-Listers and listed corporates he shares the best industry insights to increase the birth rate of more unicorns.
So you’ve spent the best part of FY2017 developing, testing, refining your offering to the world.
$60,000 of your time and at least another $140,000 through the dev team – “ otherwise a forgone deposit on a CBD apartment. Check.
You know that the R&D Tax Incentive will play its part in really helping offset the rising costs of the build and aim to lodge the application first thing in July.
But, so does every Edutech, Foodtech, Fintech, Fittech, Martech, Biotech. Over 14,000 in fact. What does this equal for most government departments?
Delays. Bottlenecks. Extended Service Delivery Times.
The expected cash inflows for August/September spill over into November and further.
Calls through to a tax office call centre can only achieve so much to expedite the process. Another case escalation to ‘high priority’ loses its impetus around the 1,000 mark.
The spend on your developers doesn’t necessarily correlate. Cash burn rates don’t shift because of a sluggish grant.
The expected windfall of $80,000 on a $200k R&D spend – taking months longer than anticipated – is particularly dire in MVP v0.9 phase. Reboot.
Doesn’t have to be this way, of course.
Putting the uncertainty of the R&D Tax Incentive cashflow issue to bed is as straight-forward as an ‘Advanced Finding’.
For the 95% that are rightfully working on their startup (to the ignorance of great grant strategy), an ‘Advanced Finding’ is essentially an R&D Tax Incentive application prepared around late May to June for purposes of gaining ‘pre-approval’ on your R&D project.
Deliberating through your application during a quieter period also helps AusIndustry process your application faster. Human nature.
Jump to the front of queue of $1.8 billion in R&D Tax Incentive funds awarded annually – and all by just attending to the inevitable a few weeks earlier in June.
Startup A in our example, learned from their mistakes next venture around and will be sure to have even their Advanced Finding lodged first in the door.
Responsibly manage the cashflow for your tech venture by lodging an Advanced Finding this June (leaning on our expertise, of course). Your venture’s cashflow will thank you for it in August.
Partner – Fullstack Advisory