The Small Business Innovation Research (SBIR) program is a crucial resource for small businesses seeking to conduct research and development (R&D). As accountants, understanding the different phases of the SBIR program and the requirements at each stage can help you better support your clients.
Additionally, maintaining compliance with the Defense Contract Audit Agency (DCAA) throughout these phases is vital.
The Three Phases of SBIR
Phase I: Proof of Concept
The objective of Phase I is to establish the technical merit and feasibility of the proposed innovation. During this phase, businesses must focus on R&D to demonstrate the scientific and technical viability of their concept. This phase typically lasts between six months to two years with a budget of up to $295,924.
Phase II: Development & Prototype
Once the concept has been validated, businesses move on to Phase II. This phase involves further development of the idea, including creating a prototype. The project timeline can range from one to three years with a budget of up to $1,972,828.
Phase III: Commercialization
Phase III is the commercialization stage, where the business seeks to market and sell the developed product or service. This phase is not funded through the SBIR program but through other non-SBIR federal agency funds, private sector investments, or self-funding.
DCAA Compliant Timekeeping: A Must-Have
For businesses involved in the SBIR program, DCAA-compliant timekeeping is essential. All contractors, including those receiving SBIR funding, must meet specific requirements to maintain DCAA compliance. These requirements include:
- Accurate recording of time spent on each project
- Regular review and approval of timesheets by supervisors
- Documentation of any changes made to timesheets
- Use of labor distribution systems that charge direct and indirect labor costs appropriately
These measures ensure that the government can accurately track how its funds are being used and that businesses are billing correctly for their work.
Understanding the SBIR phases and the need for DCAA-compliant timekeeping such as Hour Timesheet is crucial for accountants supporting small businesses in the R&D landscape.
By ensuring compliance and strategic use of funds, accountants can play a vital role in the successful navigation of the SBIR program and the growth of innovative businesses.
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With a background in business administration and project management, Debbie has always had a passion for finding ways to improve workflow processes and increase productivity. This drive led her to establish Hour Timesheet, a company specializing in time tracking software that simplifies timekeeping and enhances overall workforce management.
Under Debbie's leadership, Hour Timesheet has grown into a highly regarded provider of time tracking solutions for businesses of all sizes. The company's flagship product, a cloud-based timesheet system, offers a seamless and intuitive experience for both employees and managers.
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