Clinical trial cost accrued on enrollment rather than invoices, grants accounted against their restrictions, and R&D reconciled between book and tax.
In life sciences, R&D expense lands in the wrong period more often than not. Site payments and CRO invoices lag actual activity by months, so invoice-based accounting misstates every quarter of a clinical program.
We run the accounting and CFO function for biotech, device, and diagnostics companies from first grant through audit and partnership.
Site payments, CRO invoices, and enrollment all move on different schedules. Accruing on invoice receipt misstates R&D expense every period.
NIH and foundation funding carries restricted use, allowable cost rules, and reporting obligations that general bookkeeping does not handle, with real clawback risk.
Research is expensed for book purposes and capitalized for tax under Section 174, creating taxable income at a company with no revenue.
Upfronts, milestones, and cost reimbursements recognize on different patterns depending on contract terms.
We accrue clinical trial cost based on enrollment and CRO milestones rather than invoice receipt, account for grants against their restrictions with the reporting funders require, and reconcile the book-tax difference on R&D so the tax position is never a year-end surprise.
Driven by enrollment and contracted milestones.
Allowable cost tracking and required financial reports.
Program-level spend, book to tax.
ASC 606 analysis of upfronts and milestones.
Program economics and runway to next milestone.
Section 174 requires capitalizing and amortizing research over five years domestically, which can create taxable income at a pre-revenue company. The R&D credit is often substantial and can offset payroll tax for qualifying small businesses. Orphan drug and clinical testing credits apply in specific circumstances. IP holding structure and jurisdiction decisions have long tails and are cheapest to get right early.
Yes, including allowable cost tracking and the financial reports funders require. Grant accounting done loosely creates real clawback risk.
From enrollment data and contracted milestones, not invoice timing. Invoice-based accounting on a clinical program will misstate R&D expense every quarter.
Runway, program-level spend visibility, the R&D credit, and books clean enough for the next round and the eventual audit.
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