How to post research and development costs for a brand new product

Accounting
1

Hi

We are currently in the process of designing a brand new circuit board. Where do we post all of the costs. Is is possible to create a new ledger which just relates to this product?

Thanks

2

Yes you can tag it to new project if you like, R&D is much more than that, its not only direct cost but indirect cost too. You dont need to customise your ledgers for R&D purpose only, specialist in R&D will go through all your books anyway if you are getting their help for R&D claim

3

Thanks for your reply.

The whole product is being designed from scratch by one of our directors. Our company will be the sole supplier of this product to the open market.

Lots of components have been purchased during the development stage. As I’m not sure that these purchases could be classed as an “expense” - unless you tell me otherwise, I was just wondering which would be the correct nominal account to use? The transaction will be against the DLA for the designing director.

As our company is just starting out, I’m trying to get my head around all of this and to make sure that I do things correctly from the start. Really do appreciate all the help that this forum provides.

4

I suggest design your ledgers to help you run your business effectively to get better information out of it, when it comes to R&D get experts involved , they can suck out information they need for claim. Normally R&D firm do take their cut or you can approach directly to HMRC for R&D

5

Great. Thanks for the information and advice.