===== Why do I have zero research & development (R&D) expenses? =====

Two sources exist for your R&D expenses: research and development personnel (i.e., payroll) and Other Expenses that are allocated to R&D. The only way for the income statement to show zero expenses is for both of these components to be zero. Let's talk about them separately:

- R&D Personnel. On the menu, select assumptions/costs/personnel. Then select the Employees tab. Here are some issues that could cause zero R&D personnel expense:

  - You have no R&D employees. Examine the Salary Charged To column entries on this page. Having no employees with their Salary Charged To Research and Development would explain why you have no G&A expenses.
  - You have R&D employees, but they earn zero salaries. Make sure you enter non-zero values in the Initial Base Salary column for the R&D employees listed.
  - You have an R&D category of employee, but a zero count. Make sure you enter non-zero values in the Employee Count columns for these G&A employees.
  - You have R&D employees and a base salary, but you are not planning on paying them. This is also acceptable if that is your plan. It would be reflected as a Percentage Paid of 0% in the Advanced Settings page for each of the R&D employees.
  - You have R&D employees and a base salary, but they are not working. This makes no sense. Make sure that the Percent Time Worked column on the Advanced Settings page for each of the R&D employees is not set to 0%.
  - You have R&D employees and a base salary, but their time is being charged to COGS, not R&D. This is also acceptable if that is your plan, and is extremely common! It would be reflected as an Expense Percentage of 0% in the Advanced Settings page for each of the R&D employees.

- R&D Expenses. On the menu, select assumptions/costs/other expenses. Scan down the column labeled Calculation Rule. Make sure that some of the non-zero expenses are being allocated to either Billed to R&D or Per R&D Employee. Otherwise, this expense will not appear on the R&D line of the income statement.

{{keywords>income statement, expenses, zero, R&D, research, development}}

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