Grant Management: the work that starts after your funding is approved

What an approved grant entitles you to

A typical case: let's look at a public research grant of 820,000 euros over three years, at a funding rate of 50 percent. What you have won is an entitlement under conditions meaning the money is split into annual tranches, each with a budget that has to be used in its year, and it is paid out against drawdown requests: the funding body's own form, listing the eligible costs you incurred in the period, typically personnel, materials and capital expenditure, with the funding rate applied. At 50 percent, the funding body pays half of every eligible euro, eligibility is defined by the funding body, and documentation rules come with it: the standard conditions of German public funding (ANBest-P) require an expenditure list with the date, payee, reason and amount of every position, a project reference on every receipt, and for certain procurements at least three documented comparison offers, otherwise the cost does not count. The use of the money has to be proven afterwards as well, in an interim proof of use (Zwischennachweis) for each year the project runs and a final one (Verwendungsnachweis) when it ends. The drawdown request asks for money. The proof of use is the audit: the project reconciled against the financing plan, own contribution and other funding sources included, plus a report on what was achieved. It is where the funder checks in depth, and where funding is reclaimed if the conditions were not met.

So for the life of the project, someone has to know at all times which costs belong to it, which of those are eligible under the terms, how much of each tranche has been claimed, and when the next request is due. Multiply that by three or four parallel funding projects, each with a different funding body, a different rate and different rules, and grant management becomes a permanent tracking job on top of the actual bookkeeping, which if done by hand already eats up plenty of time.

The year-round work of keeping costs attributable

Every grant funded cost has to be assigned twice: once to the funding project that pays for it, and once to your own reporting structure, meaning the department that spent it and, more specifically, what it was spent on, such as a new machine or prototype components. The assignment has to be made on every single invoice and purchase order. A standard accounting setup has no dimension of its own for funding projects, so companies usually set them up as cost centres, one per project, next to the departments, and book the costs to them like any other cost centre. But one booking can only carry one cost centre, so the moment the project takes that place, the department view is gone and the combined reporting, what was spent per project, per machine and per department, moves into a spreadsheet: maintained by hand next to the accounting system, and reworked every time new equipment arrives or a new project starts.

The day-to-day tagging happens where the invoices are: costs are marked with their project in the invoice tool, exported at the end of the period as one large pile, and walked through line by line once more, to check that nothing was booked to the wrong project before it goes into a request. On a research grant much of the money is personnel, many people record hours, and those hours and the travel costs that come with them all have to be booked to the right project too. This is how funded companies get it done today, and not how it should work. No system holds the full picture, how much funding is left, what has been claimed, what is still open: not the accounting tool, not the bank account, only a spreadsheet that is current on the day someone last updated it.

The drawdown is where the money gets stuck

When a drawdown is due, all of that work ends up in one document: the funding body's own template, a different layout per funder, filled by typing the figures out of the spreadsheet, with the expenditure list attached as proof for every position. A drawdown is money for costs you have already paid, so every week the request is not filed, the company finances the funded project from its own account, and in practice we see requests worth six figures overdue for weeks or months, simply because nobody has had the time to compile them, or because the visibility on requirements and eligibility is unclear.

For a grant funded startup this is also a planning problem because the expected grant payments sit in a spreadsheet or directly on the drawdown request form and not in the cash forecast, so the cashflow and runway forecasts overlook inflows the company is entitled to, and the months ahead are planned on a number that is almost never the accurate one.

Grant management inside our AI-native ERP

Firstly, bringing grants into your ERP means the tracking moves out of the spreadsheet and into the same system as your books: total funding across all projects, multi-year applications split into annual tranches, each carrying the funding rate and terms set by the funding body, and every drawdown tracked against its deadline, from planned to claimed. Because the costs are booked against their funding project in the same ledger, you always know what is eligible, what you have drawn and what is still open, without exporting anything and without checking it twice.

Secondly, once the costs sit in the same place, the request in Agent F builds itself from them. You upload the funding body's own form once, and when a drawdown is due, Agent F pulls every eligible expense for that project and period into the form, applies the funding rate, and generates the expenditure list alongside it, every position traceable to its invoice. All that is left for you is to approve it and file it in the funding body's portal.

From there, Agent F posts the grant revenue to your P&L and the expected payment lands in your cash forecast with a date on it, so you always have an accurate view of your expected cash and runway, and nothing you are entitled to goes unclaimed.

Want to see this in practice? Learn how Agent F works, and book a demo at agent-f.ai/demo.