Best Practices: Optimizing Your R&D Tax Credit Process Using Today’s Technology

The traditional approach to claiming R&D tax credits has long been time-consuming, manual, and frustrating for both finance and engineering teams. But today’s technology is changing the game—enabling companies to streamline documentation, improve compliance, and maximize tax credit claims with less effort.

Here’s how innovative companies are leveraging modern tools and automation to make the R&D tax credit process easier, faster, and more audit-proof than ever before.

Why the Old Approach No Longer Works

For years, R&D tax credit studies relied on interviews, manual surveys, and paper-based tracking—a method that:

• Requires engineers to recall activities months (or years) after the fact
• Leads to incomplete documentation and IRS audit risks
• Makes it difficult to track and categorize expenses accurately

With IRS scrutiny increasing and Form 6765 changes requiring more granular reporting, companies can no longer afford outdated processes.

Solution: Adopt real-time documentation and digital tracking systems to capture R&D activities as they happen.

How Technology Is Transforming R&D Tax Credit Compliance

Leading companies are using technology-driven solutions to automate and improve every step of the R&D tax credit process. Here’s how:

1. Automated Expense Tracking & Allocation
New AI-driven platforms can automatically allocate employee time, supply costs, and contractor expenses to the right business components—eliminating manual spreadsheets.
Best Practice: Integrate your financial and project management systems (SAP, Oracle, Microsoft Dynamics) with your R&D tax credit workflow.

2. Real-Time Documentation Through Collaboration Tools
Companies are moving away from after-the-fact interviews and using Microsoft Teams, Slack, and internal project management tools to document research activities in real time.
Best Practice: Set up automated reminders and structured reporting so engineers and finance teams capture key details without extra effort.

The Future of R&D Tax Credit Optimization

As the IRS increases oversight, companies must embrace technology-driven efficiency to stay compliant while maximizing their tax savings. The shift is already happening:

• Automation is reducing manual errors and improving audit readiness.
• Collaboration tools are making R&D documentation effortless.
• Smart integrations are streamlining expense tracking and project classification.

Want to modernize your R&D tax credit process? MASSIE can help implement technology-driven solutions tailored to your company’s needs.

John Hoang, CPA

As Director of Tax Technology at MASSIE, John plays a pivotal role in revolutionizing the approach to R&D tax credits. He specializes in providing clients with innovative and forward-thinking technology solutions for their R&D tax credit c...