The Problem:
Red Ventures has grown rapidly these last few years and every part of the digital media company touches R&D to some degree. Last year, Senior Tax Accountant Chase Pierce realized that the old way of filing an R&D tax credit was becoming impossible for his small team. The process could not scale along with the company.
Beginning in September and continuing through mid-October, the tax team would complete four to five hour-long interviews every single day. They’d need to talk with engineers and team leaders on every single Red Venture team, and often would have to return for followups with certain interviewees.
“It could be very time intensive,” Chase says. “And then, obviously, after that, you had the data collection, you had to do any follow ups if you didn’t get the right substantiation documents or needed confirmation on time surveys.” The process that began each fall dragged on for months and months. “If we started in September with the interview process, it could take us through January, February, sometimes even March to get our whole process wrapped up.”
When Chase heard about Neo.Tax, he was intrigued. Red Ventures used Jira to track their project management; there had to be a way to take advantage of the contemporaneous data to streamline the process.
Here’s how switching to Neo.Tax saved Chase and his team five months of work, saved Red Ventures’s engineers hundreds of hours of interviews and data collection, and delivered an even more substantive R&D credit filing.
“We would get on a call with a person, we’d talk through, ‘Okay, your project, does it meet X? Does it meet Y? Does it meet the 4-Part Test?’ Now, that is all done at the touch of a button.”
The Neo.Tax Solution:
The big lightbulb moment for Chase happened right away when he started the R&D filing process with Neo.Tax. In previous years, after hundreds of hours of interviews, he’d have to return to each of the 30-50 team leaders to ask for time surveys and documentation and writeups for all of their projects. Because Neo.Tax’s LLM syncs directly with the Jira data, that “now all just flows basically at the touch of a button,” Chase explains.
He realized that he’d not just saved Red Ventures the 300 to 800 hours of time that engineers and team leaders were spending on phone calls with his team; he also eliminated the many more hours managers were spending chasing the data and documentation.
“Not only is it our time; there’s a mirrored amount of time on the business side,” he explains. “The engineers and the project managers have to spend a lot of time collecting stuff for us, talking to us, etc., etc., whereas now, a lot of teams, we don't even have to reach out to them at all, and for others, it’s just, ‘Hey, does this look like it makes sense?’”
“It’s a quick yes or no,” he continues. “Hopefully it’s a yes, and then we don't have to go any further. And if it’s a no, it’s usually just a quick call.”
It’s still hard for Chase to believe, but a process that had taken six months and cost Red Ventures a sizeable direct investment (in the form of payment to a third-party R&D contractor) and an even more sizeable indirect investment (in the form of hours of wasted for engineers and project leads), now took Red Ventures a single month to complete. “It used to be that each engineer or manager had to enter the interview and bring forth their own R&D data,” he says. “Now, it’s much more about verifying if this all looks right.”
Audit-Ready and Substantiated:
The time savings matters for Red Ventures in terms of productivity, but Chase and his team would never sacrifice substantiation when it came to their R&D filing. So, before switching their process over to Neo.Tax, they tested the output. “We did comparisons to our previous results, and we said, ‘Okay, this matches what we think it should be saying based on what we know about the credit,’” Chase says. “The fact that it does it automatically is a huge win.”
“It gives us as good of a result — maybe even better, in some cases,” he continues. And to get there is night and day compared to their old process. “We would get on a call with a person, we’d talk through, ‘Okay, your project, does it meet X? Does it meet Y? Does it meet the 4-Part Test?’ Now, that is all done at the touch of a button.”
For Chase, the most exciting part is that he feels audit-ready with Neo.Tax. If Red Ventures had been audited in the past, he’d have to track down a team leader who knew about the specific project to help him find the relevant tickets that the IRS requested. “Whereas Neo.Tax gives it to you like that already,” he says. “If I get audited and they ask for the source data for this project, I already have a list. If I have Jira, I can go do it myself. I don’t even need a person to help me.”
The ability to have that data available makes a massive difference when it comes to Chase’s peace of mind. The other thing that helps peace of mind is that Neo.Tax is always available for a specific custom fix for any issue that he and his team may run into while getting their R&D credit filing prepared. “You all are always willing to work with us on solutions if we run into issues. You all are always willing to bend over backwards, to be like, ‘How do we make this work? How do we get you your deliverable?’” he says. “You guys really give the white-glove service to us.”
So, Chase explains to other tax teams at rapidly growing companies, “If you’re like, ‘We need to be more efficient about our R&D credit,’ or if you just have a lot of volume that's involved in your R&D credit, Neo.Tax is a tool that can cut your workload at least in half.”
“I would give it a big, big recommend.”
