Gusto Next: Why We Are Worthy of More Credit with Joshua Lee

Gusto Editors

Original webinar date: October 22, 2021
This article is part of a series where we share the top insights from Gusto Next—the premiere conference for accounting professionals. Read the entire series and watch Gusto Next 2021.

Gusto Next 2021 featured many experts in the accounting profession who shared invaluable accounting innovations that can help you bring more value to your services. One such expert was Joshua Lee, the Founder and CEO of Ardius, which is now part of Gusto. Ardius simplifies the process of finding and claiming research and development tax credits for businesses through automation. 

Joshua discussed the importance of assisting businesses with R&D tax credits, utilizing Ardius and Gusto, and how R&D tax credits benefit both you and your clients.  

In addition to learning about how to help businesses with R&D tax credit automation, you can learn about many more modern accounting tools in the other articles within the Gusto Next 2021 series. You can also read our Gusto Next 2021 Wrapped article for helpful highlights from the event. 

Research and development tax credits in accounting 

Ardius helps accountants uncover research and development tax credits for their business clients. Ardius’ automation and discovery of tax credits are critical because R&D tax credit eligibility can often go unnoticed. During his time with the accounting firm Ernst & Young, Joshua worked on the rules and auditing procedures for the R&D tax credit: 

“I helped draft the R&D tax credit and the rules, especially as it related to software. I was fortunate enough to champion a few committees to discuss exactly how to audit the R&D tax credit, which actually led to how the IRS now … actually audit[s] the credit today and what they call the audit technique guide.”

Joshua Lee

With Joshua’s experience working on R&D tax credits, companies have sought his help to review their financials in the hopes of receiving a tax credit. 

“When someone comes up to me and says, ‘Hey, did I miss anything on my financials or my tax return?’ It’s like [gathering] six blindfolded doctors and asking them to describe an elephant in the room. It’s like, ‘Oh, it’s a spear,’ ‘It’s a snake,’ ‘It’s a tree.’”

Joshua Lee

It’s incredibly difficult for accountants to catch every tax credit for which their business clients may be eligible. Although accountants are knowledgeable about finances, they can’t be experts in every facet of their clients’ businesses:

“As accountants, the expectations are somewhat high. By showing you the books, the financials, or even some numbers, the expectation is that you should be able to identify everything and be an expert in everything. … As knowledgeable, up-to-date, [and] smart as [accountants] can be, … we may miss something or not be an expert in everything.”

Joshua Lee
Multi-ethnic group having a discussion in a coworking space

Accountants can’t always identify every available tax credit for businesses. This is especially true because accountants take on many different roles to assist their clients. People often view accounting as performing a single job, but in reality, accountants perform many tasks such as financial planning, taxes, and profit and loss statements. Additionally, many accountants assist businesses with their people operations such as payroll, HR, and benefits. Joshua noted that accountants deserve to receive more recognition for the many services they provide for businesses.

Using Ardius for tax credit rules and regulations

Because accountants fulfill so many different roles for their business clients, they need all of the tools at their disposal to identify and secure R&D tax credits for businesses. Fortunately, Ardius streamlines and simplifies the process of securing tax credits for businesses. 

“In the most simplistic form, [Ardius is] software that integrates with your financial inputs to find [and] maximize optimized tax credits. … Even after identifying the most commonly missed items for companies, it was difficult to actually find someone to help. … The method of claiming and substantiating credits involves very complex and labor-intensive tasks. In fact, even if we did have a credit, the fees that we might be charged to realize it might be even higher than the credits themselves.”

Joshua Lee

More substantial tax credits have been traditionally reserved for larger businesses that have the resources to claim and prove eligibility for tax credits. Small and mid-size businesses don’t have the same resources, but they can streamline the process of receiving R&D tax credits through Ardius. 

“What if we could automate labor-intensive tasks and accomplish them in hours and days as opposed to the more traditional ways that usually take weeks or months? [We can] optimize the accountant’s time so that we might do more meaningful things.”

Joshua Lee

Ardius simplifies the process of claiming and proving tax credits through automated software. The software has the added benefit of not being as intrusive as a traditional audit.  

“Tasks related to claiming these credits are not only repetitive, but they’re very intrusive to the clients and their time as well. … We might have to do interviews with the clients, [secure] affidavits for signatures, [complete] data collection, analytics, compliance, optimizations, and documentation. … A lot of these processes can be automated with software. We’ve simplified the process at Ardius and Gusto, [and] we’ve [taken] different inputs and integrat[ed] them into one platform.”

Joshua Lee

Gusto acquired Ardius in 2021, and with the acquisition came more convenient workflows for accountants. The Ardius and Gusto integration automatically finds and substantiates R&D tax credits: 

“We use APIs to implement data collection. We can use machine learning to do analytics, looking up job titles, locations, [and] vendor names. We use automation for compliance. We can tap into GitHub [and] JIRA. [We] look at your EPICs for documentation, OCR for textual and numerical recognition, and then basic algorithms for calculations and optimizations.”

Joshua Lee
Two coffee shop owners having a discussion while looking at a laptop

With the different automated tools included in Gusto and Ardius, small to mid-sized businesses can experience the R&D tax credits that have traditionally only been available for larger businesses. Ardius has helped numerous companies receive R&D credits through its automated software: 

“Since 2018, our R&D tax credit software has found on average two and a half to four times more credits. Because of automation and software, we’re able to scan hundreds of thousands of transactions. No credit is too small or large. We’ve done credits ranging from $1,500 all the way up to $2.4 million.”

Joshua Lee

Regardless of the sizes of the businesses that you serve, you can help your business clients save money through the automated services provided by Ardius and Gusto. 

How R&D credit software benefits you and your clients

With the integration of Ardius and Gusto into your workflow, you’ll save time that you would be spending attempting to identify and claim R&D tax credits manually. With R&D tax credit automation, you’ll have more time for your clients. 

An additional benefit to utilizing Ardius and Gusto is the real-time application of R&D tax credits: 

“Together with Gusto as an integrated platform, we’re able to utilize payroll data, generate R&D credits, and then use Gusto’s platform to offset them on a real-time basis per paycheck. No more waiting around for a check from the IRS that could [take] anywhere from three to nine months. We’re now able to offset payroll taxes and utilize the credit on each paycheck.”

Joshua Lee

With Gusto and Ardius, your clients can instantly benefit from R&D tax credits. Also, R&D tax credit software automatically stays updated with tax law changes. When claiming R&D tax credits manually, you would have to study changes to R&D tax credits, but with Ardius, you don’t need to worry about overlooking new tax rules. 

Through utilizing Gusto and Ardius, you can bring more value to your services while reducing your workload. 

“We firmly believe we can give you a competitive advantage and accelerate value together. There is no better time than the present. If your clients aren’t asking you about things like the R&D credit, maybe they will soon, or it could be a great time to proactively bring it up to them.”

Joshua Lee

Whether you’re already familiar with assisting clients with R&D tax credits or if you’re unsure where to start, Ardius and Gusto are perfect for claiming credits and saving your clients money. 

Learn about even more accounting innovations

Accountants can save themselves time while also increasing their clients’ revenues by using R&D tax credit automation. Although accountants are typically exceptional at identifying tax credits, they can miss potentially valuable credits. Rather than wasting countless hours claiming and substantiating credits without the guarantee of finding them all, you can use Ardius and Gusto to automatically find and claim the R&D tax credits for your clients. 

If you’re ready to learn about more advancements in accounting, you can watch the entire Gusto Next 2021 presentation here, or you can read critical highlights from the presentation in our Gusto Next 2021 Wrap article. Additionally, you can join the waitlist to attend Gusto Next 2022, where we’ll provide accountants with even more modern tools and innovations.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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