Where an Accounting Firm’s Unbilled Hours Go During Tax Season

During tax season, an accounting firm’s unbilled hours mostly go to work nobody prices: ad hoc client requests, chasing slips and documents, and onboarding admin. One CPA estimated their own split at 15% onboarding, 15% delivery, 60% prep and review, and 10% unbilled ad hoc work. The recoverable hours sit outside the 60%.

You know the season was busy. You know the fees came in. What you probably cannot say is how many hours your team worked that never turned into an invoice line, and where those hours went.

Most firms track billable time well enough to bill. Few track the work around it: the reminder emails, the half-finished file, the quick question that took forty minutes. That work lands on your most expensive people, and in a busy season it multiplies.

This article walks through one CPA’s own estimate of where their time goes, what that does to realization, and which pieces an accounting firm can hand to automation while the professional judgment stays with the CPA.

Where do an accounting firm’s hours go during tax season?

One CPA estimated their own time as 15% client onboarding, 15% delivery, 60% preparation and review, and 10% unbilled ad hoc work. Prep and review is the job. The other 40% is where unbilled hours hide, because nobody owns it end to end.

This is one person’s estimate, not a survey. Its value is that the shape is easy to test against your own season.

The 10% is unbilled by definition. Onboarding and delivery are where, in my view, unpriced admin hides inside work that looks billable. Prep and review is the part your fee was built around, and it is the part that most needs a CPA’s attention.

Why does the 10% of ad hoc work cost more than it looks?

Ad hoc work costs more than its share because it is unbilled, unplanned, and interrupts the billable 60%. A ten-minute client question breaks a review in progress. The reviewer loses the thread, the question turns into a lookup, and the lookup turns into an email nobody bills.

A CPA on a RunWell Blueprint beta call put it plainly: “I wouldn’t do the ad hoc, it’s so time consuming. It’s not billable.”

Few firms can refuse it, because the client asking “did you get my form?” in March is the client you want next year. So it gets done by whoever is closest, at whatever rate they cost.

The hidden cost is the switch. Ad hoc requests do not arrive in a block you can schedule. They arrive in the middle of a return, and the preparer pays for them twice: once to answer, once to get back into the file.

What does slip and document chasing cost a firm?

Slip and document chasing costs the hours between “we asked” and “we have it.” Someone sends the request, checks what arrived, sends a reminder, renames a file, and notices a missing T4 or 1099 weeks later. Each step is small. Across a full client list in busy season, the steps compound.

A CPA on a RunWell Blueprint beta call described where that leads: “You compound those during busy season, and suddenly you could spend days.”

Days, on work that produces no deliverable. Nobody bills a client for the third reminder about a missing slip.

Chasing also sits in an awkward place. It is too clerical for a CPA and too judgment-heavy for someone who does not know what a complete file looks like. So it drifts upward, toward seniors and partners, during the exact weeks their time is worth the most.

How do unbilled hours show up in a firm’s realization?

Unbilled hours show up as the gap between the value of work done at standard rates and what clients pay. That gap is realization. Hours spent on chasing, ad hoc questions, and onboarding admin either never reach an invoice or get written down when they do.

Here is the illustration I use. Say a firm does $1 million of work at standard rates and realizes 72% of it. That is $280,000 of work done and never paid for.

That figure is an example, not a benchmark, and your realization rate is your own. The point is the mechanism. Some write-downs are pricing decisions you made on purpose. Others are hours a billable person never needed to spend. Those are the ones automation can reach.

If your firm bills hourly, the related leak is time that was billable and never logged. We cover that in how billable time capture turns calendar and email into recovered revenue. This article is about the other kind: hours that were never billable and did not need a professional at all.

Which tax-season tasks can a firm automate without touching professional judgment?

A firm can automate the work that moves information around: requesting documents, sending reminders, sorting uploads against a checklist, answering status questions, and assembling onboarding packets. Preparation, review, advice, and sign-off stay with the CPA. The line is simple: automation moves the file, people decide what it means.

A CPA on a RunWell Blueprint beta call asked the question that sits under all of this: “Why is this manual? I shouldn’t have to worry about this.”

In the setup described here, nothing in the right-hand column moves. You are automating the logistics that keep pulling your accountants away from the accounting. For a wider list of this kind of work, see the mundane tasks AI should take off your team.

Any system that moves client files also touches client data. In an August 2026 release on written information security plans, the IRS listed this among what the Federal Trade Commission requires of each tax and accounting firm:

“Select service providers that can maintain appropriate safeguards and ensure their contracts require compliance.”

Source: Internal Revenue Service, IR-2026-92, “IRS, Security Summit remind tax pros they need a Written Information Security Plan to protect client data,” Aug. 18, 2026.

That is US guidance, quoted to show the kind of question a firm may choose to ask of any automation vendor. Your own regulator and advisors decide what applies to your practice.

In Canada, the Office of the Privacy Commissioner made a similar point in September 2026 guidance for businesses covered by PIPEDA, which it opened for public comment until Dec. 4, 2026:

“Organizations should assess a third party’s privacy practices before obtaining products, services, or technology that involves the collection, use, or disclosure of personal information.”

Source: Office of the Privacy Commissioner of Canada, “Guidance on assessing third-party service providers,” Sept. 10, 2026.

Where should an accounting firm start before next tax season?

Start by measuring one season against the split above, then fix the slice that pulls the most senior time. Document chasing and ad hoc status questions are strong candidates, because both tend to land on billable people. Build and test outside busy season, never in March.

Map your own split. Ask each person to estimate their season the same way: onboarding, prep and review, delivery, ad hoc. Rough numbers are fine. You are looking for the slice that surprises you.

Find who absorbs the leak. A leak handled by an admin costs less than the same leak handled by a partner. Rank the slices by who does them, not only by hours.

Clean up before you automate. A checklist that differs for every preparer will be chased inconsistently by any system. Standardize the request list and the file stages first.

Build in the quiet months. A system tested on extension clients in the off-season is ready for the first engagement letter of the next one. If you want to see how this maps to your firm’s tools, the accounting firm automation page shows the builds we focus on.

If you want your own numbers rather than one CPA’s, the free RunWell Blueprint is the next step. It takes about 1 to 3 hours on your own time, your results come back within 24 hours, and a free results call of 30 minutes to an hour follows. If you want the builds done for you, that is the Engine, billed hourly and quoted after the results call.

Frequently Asked Questions

What counts as unbilled hours in an accounting firm?

Unbilled hours are hours your team works that never reach an invoice. In tax season they are mostly ad hoc client questions, slip and document chasing, and onboarding admin. One CPA put their own unbilled ad hoc share at 10% of the season, before counting the unbilled parts of onboarding.

Is unbilled time the same as low realization?

Not quite. Realization compares billed or collected fees to the value of work at standard rates. Unbilled hours are one cause of low realization. Write-downs on hours you did bill are another. Automation mainly reduces the first kind, by keeping billable people off non-billable logistics.

Will automating document chasing change how my firm prepares returns?

It does not have to. In the setup described here, automation requests, reminds, and sorts documents against your checklist, while preparation, review, and sign-off stay with your people. The CPA still decides when a file is complete. What changes is who spends hours getting the file to that point.

When should a firm automate tax-season work?

Between seasons. Build after filing deadlines pass, test on extension clients or a small group, and have it running before engagement letters go out for the next season. Starting in the middle of busy season puts a new system on top of your heaviest workload.

This article is general information about operations and automation. It is not accounting, tax, legal, or compliance advice, and RunWell is not an accounting firm. Check with your professional body, your regulator, and your own advisors before changing how client data is handled.