How TXIO Corporation achieved SR&ED success: The role of professional guidance
How TXIO Corporation achieved SR&ED success: The role of professional guidance
Scientific Research and Experimental Development (SR&ED) tax credits can help your business cover the costs of investing in research and development. However, the claim process is complex, and it is important to understand:
- The role of an advisor
- The role of a business owner
We’ll also share a case study showing how MNP worked with TXIO Corporation, an Ontario-based fintech company, to achieve a successful SR&ED claim outcome.
Your business needs to innovate to remain competitive — and the Scientific Research and Experimental Development (SR&ED) program can help you fund some of those activities. However, the application process is complex, and you need the right guidance to achieve success and receive a financial incentive for your investments in research and development. How can you navigate the SR&ED claim process to receive funding for your efforts?
Let’s discuss what SR&ED is and review a case study of how SR&ED helped support TXIO Corporation, an Ontario-based fintech company. We’ll also examine the importance of professional guidance and the role of a business owner and an advisor in the SR&ED claim process.
What is SR&ED?
The SR&ED program is a federal and provincial tax incentive program designed to help businesses innovate or undertake Research and Development (R&D) in Canada. In Ontario, it can provide up to a 66-percent investment tax credit on eligible SR&ED expenditures and also provides a deduction against income. This helps encourage Canadian businesses to pursue scientific and technological advancements that may lead to new or improved products/processes.
Many companies put revenue-generating activities on hold while pursuing innovation. However, it is common to encounter challenges during the process that delay the return on investment. SR&ED helps companies regain some of the money spent on scientific and technological activities, which is especially beneficial when you encounter challenges with innovation.
However, it is crucial to pay careful attention to the parameters and requirements for SR&ED claims. A knowledgeable advisor can provide professional guidance to help you identify eligible SR&ED projects and optimize the return on your R&D investments.
Case study: TXIO Corporation
TXIO Corporation (TXIO) is a fintech company located in the Greater Toronto Area (GTA). TXIO develops a sophisticated software framework for various aspects of finance, including asset custody, brokerage, and solutions for personal finance management.
The company wants to innovate in the fintech space and develop more sophisticated financial software. TXIO began to apply for SR&ED tax credits shortly after its founding to support its investments in innovation.
TXIO found the SR&ED claim process challenging to navigate alone — as achieving optimal results from the process requires an in-depth understanding of tax law and Canada Revenue Agency (CRA) administrative policies. Detailed record-keeping and a structured approach to tracking activities is critical for SR&ED success. MNP worked with TXIO to put the proper organizational processes in place to ensure that employees tracked their time and identified which projects they were working on. MNP also worked with TXIO to formalize the company’s problem-solving methodology for its SR&ED claim, which helped improve TXIO’s engineering processes.
TXIO’s successful SR&ED claims, and the resulting funds helped the company develop complex and sophisticated financial software. TXIO has become a long-standing client of MNP and has worked with the firm to apply for SR&ED tax credits successfully for many years.
Scientific Research and Experimental Development (SR&ED) Services
How to achieve SR&ED success
TXIO and MNP worked closely together to achieve a successful outcome from the SR&ED claim, and both provided unique knowledge and perspectives to support the process. Let’s review the role of an advisor and the role of a business owner during the application process to understand how each can contribute to a successful claim outcome.
Role of a business owner
Business owners are primarily focused on driving their business forward and achieving their organizational goals. However, the business owner has important knowledge that can help support a successful SR&ED claim.
- Organizational knowledge — Business owners have important insights into the projects and processes within their business. They can provide important information about the current projects taking place and the challenges they are encountering. Additionally, they can provide feedback on whether the processes in place are adequate to support an SR&ED claim.
- Stakeholder buy-in — Changes to organizational processes require the support of key stakeholders. The business owner plays a crucial role in communicating these changes to employees and showing support for these changes to obtain buy-in across the organization.
- Ongoing monitoring — SR&ED claims may require changes to organizational processes such as time tracking and documenting challenges and the approach the company took to achieve a successful outcome. The business owner can provide ongoing monitoring to ensure time is being tracked correctly and projects are being identified in the documentation.
Role of an advisor
An advisor provides guidance in several key areas to help business owners save time and achieve successful claim outcomes.
- Technical expertise — The SR&ED program is a very complex and tax-focused program administered by the CRA. A successful outcome from a SR&ED claim requires both a technical professional in your specific field of science and technology as well as a tax professional who understands the complexities of the legislation and requirements from the CRA. An advisor has the knowledge to help you meet the requirements and accurately present your work to the CRA to avoid pitfalls.
- Identify challenges — SR&ED provides financial benefits to help your business continue addressing challenges and uncertainties that arise due to being innovative. However, it can be difficult for business owners to identify those challenges — and an advisor knows what questions to ask to uncover issues that SR&ED could help subsidize.
- Proper documentation — Documentation is necessary to support your SR&ED application. An advisor can assess your existing documentation and help make adjustments to your organizational processes to support better time tracking and properly identify the projects your team is working on.
Next steps
Insights
-
Progress
April 25, 2025
How conflict can be good for your farms future
Family farms thrive when they tackle conflict early. Tough conversations build trust, sharpen decisions, and protect the farm’s future for the next generation.
-
Progress
April 23, 2025
With cloud-based bookkeeping, who actually manages your finances?
When you combine cloud-based accounting with an external bookkeeping advisor, both parties bring unique skills that help drive your business towards its goals.
-
Progress
April 22, 2025
A roadmap for passing the family dealership to the next generation
For family-owned dealerships, passing ownership of the business to the next generation means considering more than just the financials.
