The fallacy of size: Rethinking scale, ambition, and efficiency in the delivery of R&D tax services

There’s a longstanding belief among some clients that larger firms inherently offer more value or better advice – they certainly seem to charge more!

While scale can offer advantages, it is not the only path to achieving growth and delivering exceptional service.

It is time to debunk the myth that size limits ambition, particularly focusing on how technology and external support can enable practices to punch above their weight—and that’s especially true regarding R&D tax services.

The opportunity in R&D tax services

Many accountancy firms are turning to R&D tax services as a conduit for deepening relationships with clients.

While the legislation has been going through some significant changes recently, and there is a perception that complexity has increased, the value that is delivered to clients simply by working through the process of understanding whether they are eligible should not be underestimated, irrespective of whether a claim is made.

Whether the service is profitable, or delivered at zero margin, the value it brings often paves the way for upselling additional, more lucrative advisory services that can generate long-lasting and useful relationships.

It’s a win-win scenario that can create new opportunities for diverse growth that smaller practices might otherwise struggle to achieve.

Reimagining growth

Adding R&D tax services can diversify your service portfolio, increase your fee income through upselling, broaden the range of industries you serve, and build unique expertise that sets you apart from competitors.

Growth in services

Offering R&D tax services can be a great step in diversifying your service portfolio further. Once you’ve successfully helped a client with an R&D tax claim, the door opens for more advisory services, financial planning, and other specialised financial services.

Growth in fee income

R&D tax services have been a high price and margin activity, especially for larger firms and consultancies, for some years.  However, with recent changes to legislation, those firms are finding that their margins are diminished as their high overheads clash with squeezed tax rates. Some are even walking away from certain parts of the market, especially where claims and therefore contingent fees are lower. For smaller firms, with lower overheads and the ability to utilise technology and external expertise, this presents an opportunity to support clients who are no longer able to work with the bigger firms. We’re seeing more small firms being approached for support from clients for this very reason

Margins can be healthy for smaller firms, even on smaller claims, but we are seeing firms offering service on a low- or even zero-margin basis, simply because the additional services they are upselling are contributing to more robust fee income overall through deeper and stronger client relationships. Clients are much more likely to invest in a bundled package of services once they’ve seen the quality of your work and the benefits it can yield.

So it’s up to you – build a competitive but still profitable service line by utilising tools to deliver healthy margins or focus on client value with a view to upselling other services. Both models have their merits.

Growth in potential audience

R&D tax services aren’t industry-specific; they cut across multiple sectors from technology to manufacturing. By adding such a versatile offering to your service portfolio, you increase the range of industries you can serve and of course you’re demonstrating a “can-do” attitude at the same time.

Growth in deliverable expertise

Executing successful R&D tax claims requires an in-depth understanding of tax legislation, financial analytics, and the client’s industry. As you build a track record, your firm develops unique competencies that can serve as powerful differentiators in the market.

One of the biggest hesitations about service diversification might be your perceived lack of expertise, or the potential increase in administrative burden and complexity for your firm.

Enter technology. With the right tools and software solutions, you can offer a robust R&D tax service without compromising on efficiency or increasing headcount – especially where it is backed up by technical support.

Utilising a platform like WhisperClaims eliminates the need to become an overnight expert in the nuances of R&D tax claims.

Our software provides a streamlined and repeatable process that takes you through every step of the claim, ensuring that you meet all the compliance requirements.

Cost-effectiveness

You get the expertise and support you need to offer a new service at a fraction of the cost of either building from scratch or outsourcing to specialists. With technical expertise only a phone call or live chat away, you can be confident that you can deal with most scenarios a client can confront you with.

Efficiency

Time is another resource saved. Learning to deliver a new service can be time-consuming, but a well-designed platform like WhisperClaims offers a turnkey solution that enables you to start offering R&D tax services immediately.

Even for firms already delivering a service, this combination of technology and support brings new efficiencies to your team and ensures that you keep well ahead of the legislative changes that continue to hit this area of tax advice.

Ready to outgrow perceptions?

In today’s dynamic business environment, size is not the ultimate determinant of a firm’s success or its ability to deliver value. By leveraging technology and specialised external support, even smaller accountancy firms can offer services traditionally associated with much larger entities.

WhisperClaims demonstrate how external support can provide a more cost-effective and efficient path to adding R&D tax services, enabling your practice to achieve more without overstretching your resources or diluting your focus.

With the right approach and support, your practice, regardless of its size, can become a multifaceted powerhouse capable of delivering real value to clients.