R&D record-keeping requirements

1. Overview

To support an R&D Tax Incentive claim, you must maintain adequate records that demonstrate:

• The activities conducted
• The presence of technical uncertainty
• The experimentation undertaken
• The expenditure incurred

While Division 355 does not prescribe a fixed format for documentation, you must be able to substantiate your claim if reviewed by the ATO or DISR.

The strength of your claim depends heavily on the quality and timing of your records.

2. Why This Matters for R&D Compliance

A common compliance risk is retrospective reconstruction.

Reconstructing experimentation months or years later often results in:

• Incomplete descriptions
• Missing evidence
• Inconsistent time allocations
• Weak linkage between activities and expenditure

Contemporaneous documentation (created during the R&D process) is significantly more defensible than end-of-year summaries.

You should be able to demonstrate:

• What uncertainty existed
• What experimentation was performed
• What outcomes were observed
• Who was involved
• What expenditure relates to those activities

If records cannot support these elements, eligibility may be challenged.

3. How It Works in Synnch

Synnch is designed to support structured, ongoing documentation rather than retrospective claim drafting.

Within the platform, record-keeping is structured across:

• Projects (technical objective context)
• Core and Supporting activities (experimentation logic)
• Timesheets (time allocation and task based description)
• Evidence uploads and links (technical substantiation)
• Expenditure tracking (financial linkage)

Regular documentation throughout the year:

• Reduces reconstruction risk
• Improves consistency
• Strengthens audit defensibility

Automated reminders and structured workflows help maintain contemporaneous records.

The goal is not simply to prepare a claim, but to build a defensible documentation trail as the R&D occurs.

4. Practical Example

A software company logs experimental work weekly, uploads testing results, links Jira repositories, and allocates staff time to defined Core activities.

At year end, the claim is supported by:

• Clear technical descriptions
• Timestamped evidence
• Time allocation records
• Linked financial data

Because documentation was maintained throughout the year, the claim can be substantiated without reconstruction.

5. Common Mistakes

• Waiting until year end to document activities
• Writing narrative summaries without underlying evidence
• Failing to link time and expenditure to specific activities
• Relying solely on financial records
• Treating documentation as a formality rather than compliance infrastructure