Most people think SR&ED (Scientific Research and Experimental Development) is a Canadian tax credit program.
It’s not.
It’s a capital recycling system that quietly funds innovation across Canada reducing burn, improving cash flow and extending cash runway without dilution.
But the more interesting angle isn’t on the startup side.
It’s on the accounting side.
Because right now, SR&ED might be one of the most under-built service lines in public accounting.
What This Actually Looks Like in Practice
Inside RSSL Mergers, this isn’t theoretical.
A large portion of my time as a Founder, roughly 70% is spent on building: AI workflows, data systems, product logic and continuous experimentation. This kind of work naturally creates technical uncertainty, which is exactly what SR&ED is designed to support.
When structured properly, that effort turns into a meaningful claim.
In our case, that translated into roughly $200K in SR&ED benefits, split between cash refunds and future tax credits.
The impact is immediate and compounding.
The cash portion improves liquidity. The credits reduce future income tax exposure. And together, they create something most founders don’t fully appreciate: a system where building product feeds back into the balance sheet.
The Flywheel
At a high level, the SR&ED system is simple:
Innovate → Claim → Get paid → Reinvest → Innovate more
But over time, it begins to feel less like a process and more like momentum.
The work a founder is already doing, building, testing and figuring things out doesn’t just move the product forward. It starts to feed back into the business itself. As the company continues to build, the system begins to return capital, making it easier to keep going.
That is the shift.
SR&ED stops feeling like a separate program a company applies for and instead becomes part of how the business sustains and funds its own progress.
Now Zoom Out: The CPA Opportunity
Most CPA firms are still anchored in compliance with year-ends, tax filings, historical reporting.
Meanwhile, their clients are building:
- Innovative Software
- AI workflows
- Internal systems
There’s a disconnect.
Because while all this innovation is happening, a significant portion of it is either not being claimed, under-claimed or poorly documented - not because founders don’t want to claim it but because no one is properly guiding them.
SR&ED will change the role of a CPA firm.
Instead of simply filing taxes, the firm becomes part of how innovation is funded. It moves from looking backward at what has already happened to actively supporting what the business is trying to build next.
Why SR&ED Should Be a Core Division
This isn’t just another service line, it changes the economics of a firm.
Take a typical SR&ED claim of $100,000 in refunds.
At a 10–15% fee, that’s $10k–$15k in additional revenue on a file with a client you already have. Imagine telling an audit client we can also process your SR&ED claim for you and doubling a regular $15k fees to $30k with SR&ED filings.
And unlike audit, this work doesn’t rely on traditional CPA capacity in the same way.
You can build teams around:
- Technical writers
- Data and process analysts
- Engineers working alongside CPAs
This is one of the few service lines where revenue isn’t capped by CPA headcount.
What’s Already Happening in the Market
Large firms particularly within the Big 4 have started pulling SR&ED deeper into their consulting practices, recognizing that this is not just compliance work but advisory tied directly to innovation and growth.
At the same time, there is a quieter movement happening behind the scenes.
Independent SR&ED teams are beginning to explore what it looks like to scale and in many cases, that conversation leads to acquisition by a larger CPA firm. As client expectations rise and claims become more sophisticated, operating as a standalone team becomes harder to sustain without broader infrastructure.
We’re already working with a few independent SR&ED teams who are thinking about this transition, which creates a very real opportunity.
What this creates is a clear inflection point for the market and firms that move early can build this capability internally and integrate it into their broader offering.
Final Thought
Innovation is no longer separate from accounting work, it is creating it.
As the world turns an AI corner and businesses increasingly look for ways to innovate, more time is being spent on building systems, testing ideas and developing new processes. With that shift, the need to properly document and translate that work into financial outcomes continues to grow.
SR&ED brings that activity into focus.
It turns what was previously untracked and informal into work that is structured, reportable, government-supported, and ultimately billable for CPA firms.
