Deciding whether to prepare your company’s SR&ED claim internally or to hire an external consultant is an important consideration for any business engaged in R&D. While it’s tempting to take control of the process in-house, especially for cost reasons, there are trade-offs to think through carefully.

One of the most obvious advantages of handling SR&ED internally is cost savings. Consultants typically charge between 10% and 20% of the claim, so preparing the claim yourself could preserve more of your tax credits—sometimes up to a quarter of your R&D budget. That’s a strong incentive, especially for companies looking to reinvest those funds directly back into innovation.

In-house preparation also builds internal knowledge and long-term capability. Teams that understand how SR&ED works tend to identify more eligible projects and keep better documentation throughout the year. When technical leads and managers are SR&ED-aware, they naturally contribute to building stronger claims. Over time, this internal familiarity can lead to more consistent and optimized submissions. Some companies even offer incentives to staff who contribute to tracking SR&ED-related work, which helps further embed that knowledge into daily operations.

Another benefit is the tight integration between R&D efforts and SR&ED documentation. Internal teams are in a better position to monitor activities in real time and keep everything aligned with CRA expectations. Since they’re closer to the work, they can document progress as it happens instead of scrambling to reconstruct it later. This kind of coordination between departments makes it easier to ensure accuracy, and reduces the risk of missing out on claimable projects.

That said, SR&ED is not simple. The program’s eligibility criteria are technical and specific, and they evolve. Understanding the scientific requirements and financial rules well enough to avoid mistakes can take considerable time and training. Without deep familiarity, a company risks submitting inaccurate claims—or worse, triggering a CRA audit that might lead to reduced credits or penalties. Staying current with CRA expectations is a job in itself, and many teams find it hard to keep up, especially if SR&ED is only one of many responsibilities.

Another challenge is internal bandwidth. SR&ED work is detailed and time-consuming, and assigning it to existing staff can take them away from their core R&D duties. The opportunity cost of pulling a senior developer or project manager off their technical work just to focus on compliance can outweigh the savings from avoiding consulting fees. Burnout and reduced productivity are also real risks if employees are stretched too thin.

There’s also the cost of training. While it may not show up as a line item, onboarding staff into the nuances of SR&ED and setting up an internal process is expensive in terms of time. Depending on the size and complexity of your claim, it may actually cost more in internal hours than hiring an experienced consultant. And when it comes to managing CRA audits, internal teams often lack the experience to respond effectively. That’s one reason why many companies bring in consultants even if they’ve prepared the rest of the claim themselves—just to help navigate the audit.

Whether or not internal management is the right choice depends on several factors. Larger companies may have the resources to build internal capacity, while small or midsized firms often find it more efficient to outsource. The key is understanding the skills, time, and risk tolerance your team can support. If you already have some SR&ED knowledge on your team, you may be able to handle parts of the process yourself and outsource the rest. But if your internal expertise is limited, or you’re not confident managing risk or audit exposure, a consultant can provide valuable support and peace of mind.

Ultimately, it comes down to what works best for your company’s size, goals, and internal capabilities. Fundomation offers free SR&ED consultations, so if you’re unsure what direction to take, we’d be happy to help you evaluate your options.