The EMDG (Export Market Development Grant) is one of the best sources of government funding for SMEs looking to take their business global.
The grant offers up to a 50% rebate (minus the first $5,000) on any expenses incurred when marketing your business into international markets (up to $300,000).
This means getting back up to 50% of the cost on all those business trips, airfares, international trade shows, hiring overseas reps, print and digital advertising, to name a few claimable items. Sound appealing? If you think so then you’re not the only one.
The EMDG provides $131 million in funding for Australian businesses every year, with a maximum grant entitlement of $150,000 per applicant.
The grant is paid in two instalments, with an initial payment (usually $40,000) upon grant award, then the balance of $110,000 is paid on a pro-rata basis depending on how much funding is left in the program’s budget at the end of financial year.
Naturally – the grant is heavily audited.
If you submitted an EMDG claim for eligible expenses for the FY17/18 by the November 30 deadline last year, you should expect to be audited anytime from February 2019 – especially if you’re a first-time applicant.
Getting through the application and mountains of paperwork to submit is one thing, but are you ready for audit season?
If this is the first time you’ve heard of EMDG and you want to know if you’re eligible to claim, click here for a rundown on how the EMDG program works.
What should I expect in an audit?
The EMDG audit process is governed by Austrade, which has a dedicated auditing team. Your claim will be assigned an auditor, who may request further evidence for your claim either via email or in-person.
If Austrade requests an in-person audit they will suggest a date and time. If you’re not available on this date, you’re able to suggest an alternative date.
You should allow approximately two hours for an in-person audit. If you worked with a grant consultant, they should be with you during the audit.
Audits can be stressful – but they don’t have to be. For your business to survive EMDG audit season, read more below to make the process a smooth one.
1. Remember audits can happen at any time until EOFY
If you submitted your EMDG application by November 30 last year, you can expect your EMDG grant to arrive in your account anytime from February until June this year. In extreme circumstances, some clients have had to wait beyond the end of financial year, however this is rare.
It’s common for Austrade to request an audit before your grant is allocated. There are cases where the auditor will review the file themselves and approve the EMDG payment without an audit. However, this is the exception and not the rule. If you have submitted an EMDG application, you should expect to be audited.
2. Avoid contacting Austrade directly
If you have a question about your claim or audit, avoid contacting Austrade directly and let your consultant be the middleman.
Austrade cannot be pressured into handing over your grant funding by a certain date and will not be swayed to include claims that don’t have sufficient evidence behind them.
The EMDG is governed by an Act and as with all laws there are grey areas. A consultant will know what to expect and how to handle any questions you may not have the answer to.
3. Make sure you are covered for EMDG audits by your grant consultant
Most businesses engage a grant consultant to submit their EMDG claim on their behalf because of the heavy amount of paperwork, red tape and auditing required.
If you have used a government grant consultant, now is the time to make sure you are covered for all EMDG audits, including in-person audits. We always include EMDG audits in our consultant fees, however not all firms operate this way.
Ask your consultant about the audit process and the cost if you haven’t already. You should also ensure they will handle any appeals on your behalf at no extra cost. If they want to charge you extra for the audits and appeals on top of your grant application fees – it may be time to shop around for a new consultant for next year!
4. Be prepared to submit paperwork within seven days
Ensure you have all your documentation and evidence of each claim ready to go. For most audit requests, you will have seven days to submit the evidence required. If you miss this deadline, then your claim may be rejected.
If you have engaged a consultant, they will be prepared for this and have all of the compiled evidence. However, Austrade may request evidence that was not submitted in your original claim. If this happens, you should expect your consultant to be working with you to compile a response to whatever Austrade requires as soon as the request comes in– they know if you miss the deadline, your claim could be rejected.
That could mean missing out on tens of thousands, or even hundreds of thousands of dollars of cold hard cash, something no small business owner wants.
Remember, it’ll all be worth it in the end!
Government grants that are entitlement-based, i.e. if you meet the criteria you will be granted the funding, do take time and effort but are always worth it.
I have had clients who have received the maximum of $1.2 million in funding (over eight years) thanks to EMDG, which has been a significant driver of their international expansion. Include the fact that you can claim for a maximum of eight years, it’s no wonder the EMDG has done wonders for the yearly cashflow and growth of so many businesses.
For any business owner, a government grant can be the key to helping your business grow.