R&D Time Allocation
Work out how much of each person's time went to each project, using their own input. The result feeds the cost calculation and gives a reviewer a record of how every split was made.
Why time allocation matters
Wages are usually the largest cost in a research credit claim, and the share of each person's time spent on qualifying work decides how much of their pay counts. That share has to come from somewhere. If it is a round-number guess made by a manager at year end, it is easy to question. If it comes from the people who did the work, supported by records and adjusted for a stated reason, it is much stronger. The time allocation module is built to produce the second kind.
What it does
The agent splits staff time across projects using short surveys and interviews, so the allocation reflects what people actually did. The result feeds the cost calculation for each project. It combines what people say with what the records show, such as timesheets and project activity, and highlights places where the two disagree.
How it works
- 1
Ask the team
Short surveys or interviews collect each person's view of their time. The questions are about projects they know by name, and take minutes to answer.
- 2
Compare with records
The agent sets those answers beside timesheets and project activity and flags large differences for a person to look at.
- 3
Allocate
Time is split across projects and business components, with each person's total adding up to the time they worked.
- 4
Review
Managers and the reviewer check the split. Any adjustment needs a reason, which is saved.
What you get
- Allocations based on staff input rather than a single estimate.
- A clear link from each person's time to project cost.
- A record of how each split was made, who changed it and why.
- A list of people whose allocation depends on thin or conflicting information.
Sources of time information and how they are used
No single source is perfect. The module keeps all of them visible so the reviewer can judge.
| Source | Strength | Weakness | How the agent uses it |
|---|---|---|---|
| Staff survey answers | Reflects what people say they did | Memory and optimism | Primary input, compared with records |
| Timesheets | Recorded at the time | Often coarse or by client | Cross-check and basis where detailed |
| Project activity | Shows what was touched | Not a measure of hours | Supporting evidence of involvement |
| Manager review | Knows the context | May not see everything | Final adjustment with a stated reason |
A worked example (illustrative)
The figures here are invented. An engineer's survey says she spent about two thirds of her year on a new analytics engine and the rest on support. Her timesheets are coded to a single internal code, so they do not help. Project activity shows heavy involvement in the analytics engine in the first three quarters and almost none in the fourth, when she moved to support. The agent proposes a split that reflects this pattern and flags that her estimate of two thirds may be high for the year as a whole. Her manager agrees to a lower share and writes one line explaining the move to support. The reviewer sees the original answer, the evidence, the adjustment and the reason.
Handling awkward cases
Some people work on many projects for short periods, and some projects are shared. The module can handle both, but it works best when the project list is sensible: not so many projects that nobody can remember them, and not so few that everything is lumped together. For part-year staff, contractors and people who changed roles, it keeps the allocation by period, so a split for one quarter does not leak into another. Where nobody can say with confidence how a person spent their time, the honest record is that the allocation is uncertain, and the reviewer decides how to treat it.
Limits
Allocation is a judgment supported by evidence, not a measurement. The module makes the judgment visible and consistent. It cannot create precise hours for work that was never tracked, and it does not decide which activities qualify, which is a separate step done by a professional. It also does not guarantee that a particular allocation will be accepted. A licensed CPA or enrolled agent reviews it, and forms are filed through an authorized IRS e-file provider or tax software.
Good practice for time allocation
- Ask people about projects they know by name, not about abstract categories.
- Survey regularly through the year, so answers rest on recent memory.
- Treat large disagreements between survey answers and records as questions, not errors.
- Record a reason for every manual adjustment.
- Keep allocations by period, so changes of role are reflected.
Questions a reviewer is likely to ask
A reviewer will want to know who decided each split and on what basis. They will look at people whose allocation is a round figure and ask whether anything supports it. They will check that part-year staff, new starters and people who changed roles have splits that make sense for the time they were there. And they will want to see that wages in the claim follow from the allocation, not the other way round. The module is designed so each of these questions has an answer on screen, with its source.
Why this step is worth getting right
Because wages usually make up the largest share of a claim, small differences in allocation can change the total a great deal. That makes it a natural focus for anyone reading the claim critically. A well-supported allocation also makes the rest of the claim easier to believe, because it shows the business has paid attention to how the work was done.
Time allocation questions
Do staff need to track hours all year?
It helps, but it is not required. The module can work from short, regular surveys combined with project activity.
What if people overestimate their time?
The module compares answers with records and flags large differences. The manager and reviewer decide how to adjust, with a reason.
Can managers change a split?
Yes. Changes are allowed and recorded with a reason.
How does this connect to costs?
Each person's allocation links to their pay from payroll, so the cost for each project follows from the split.
Is the allocation final?
It is final only when the reviewer accepts it. The module records how it was reached.
Keep exploring
R&D Documentation Capture
Capture R&D evidence while the work is happening, filed by project and ready for a reviewer.
Learn moreFour-Part Test Screening
The agent tags each activity as qualified, unqualified or needs review, with reasons.
Learn moreR&D Cost Capture
Pull the costs that go into the credit from accounting and payroll and code them to projects.
Learn moreSection 174A Tracking
Keep research and experimental costs organized for the way Section 174A treats them.
Learn morePlease note: Estimates and drafts are prepared by software for review by a licensed CPA or enrolled agent. This is not tax advice.
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