How R&D Tax Credits Can Improve Your Financial Forecasting Accuracy
Many forecasts fail to meet accuracy standards because the R&D tax credit is not correctly incorporated into the model. What used to be a post-filing tax adjustment has now become a timing lever that shapes liquidity, runway, and even investor confidence. With new IRS reporting standards and Section 174 capitalization changing how and when benefits appear, FP&A teams can’t afford to treat the credit as an afterthought anymore. Here’s a look at how mapping the R&D credit into your forecast can bring greater precision to cash flow and tax planning. Why the R&D Tax Credit Matters for Forecast Accuracy Nearly every CFO can recall a forecast that diverged from reality—perhaps an unexpected cash-flow deficit or a tax liability recognized sooner than planned. In most cases, the issue is not the model itself but timing, and R&D accounting remains one of the most common sources of that distortion. That’s where the R&D Tax Credit hides in plain sight. On paper, it’...