Accounting firm structure: building an efficient framework

At The Access Group, we have worked with many accounting firms, helping them select the right accounting practice management software to scale and grow. We understand that implementing any new accounting firm's organisational structure requires much imagination and planning.

In this article, we'll outline the essential elements of an accounting firm structure to optimise your efficiency as your accounting practice grows.

Understanding the importance of an accounting firm structure

Often, accounting firms will make reactionary tweaks to their team structures to cut costs, cope with changes in personnel or aim to improve efficiency. It is important to remember that piecemeal modifications can negatively impact your accounting practice workflows.

It would help if you considered redesigning your accounting firm structure whenever there is a change to your strategic vision, long-term goals, internal processes or accounting services.

Redesigning the best accounting firm organisational structure to suit your new direction will require you to look inwardly at the following:

The size of your accounting firm
The services you offer
Your roles and their functions
Your internal processes
Your target market, and
Your long-term strategic goals.

For more advice on scaling your firm as it grows, please read our article: how to grow your accounting practice.

How are accounting firms structured?

Choosing the best business structure for accounting firms will depend on your accounting firm's size.

This section looks at standard accounting practice structures to help you determine the most appropriate way to align your accounting team.

Small accounting practices

Small accounting firm structures (up to 5 employees) will usually be straightforward, with a clear organisational hierarchy.

A small accounting firm's organisational structure will typically consist of the following:

The accounting practice owner: responsible for the higher-level decision-making and firm management, who may also have responsibility for nurturing accountant-client relationships and performing accounting tasks of higher value.
A manager or partner: this person is responsible for the day-to-day operational management of the accounting firm, including accounting practice staff recruitment and management, financial and business decision-making and ensuring clients receive quality accounting services.
Accountants: performing most accounting tasks, practice accountants will prepare tax returns, financial statements and audits for their clients, often using accounting practice management software to perform these services.
Administrative staff: an office manager or admin assistant may also look after the scheduling of appointments, records maintenance and dealing with daily correspondence. Occasionally administrative duties will be rolled up into an outsourced function for smaller accounting practices. For more ideas on accounting outsourcing, check out our article: accounting outsourcing vs. Hiring an accountant.

Learn more about accounting firm business models in our article: starting an accounting practice.

Medium accounting practices

Medium-sized accounting firm structures (6-15 employees) can be diverse based on the number of staff, the accounting services provided, and strategic vision and growth plans.

A medium accounting firm's organisational structure will typically consist of the following:

Partners: In medium-sized accounting firm staff structures, one to two partners will lead the business direction and strategic vision. They are also responsible for the success of the accounting practice and take care of client relationships and team management.
Managers: The next in the reporting line will be one to two managers supervising the firm's accountants. The accounting firm managers ensure that accounting tasks and projects are completed on time and meet budget goals.
Accountants: Accounting team members report to management and will be responsible for performing day-to-day accounting work, such as tax returns, compliance work and financial statements.
Office managers: An office manager will be responsible for administrative and HR duties. They'll take care of staff management and office operations and may also be involved in managing the accounting firm's finances.

Large accounting practices

Large accounting firm structures (more than 15 employees) can become more complex, with multiple divisions or teams, each with a different management structure and reporting lines.

A large accounting firm's organisational structure will typically consist of the following:

Partners: in a large accounting firm, multiple partners are responsible for making critical decisions about the firm's strategic decisions.
Directors or managers: Senior associates oversee at least one division or team in the accounting firm.
Team leaders: Divisional or team leaders will manage groups of accountants or support staff, ensuring their work is completed on time to a high standard.
Accountants: Reporting to team leaders, accountants typically use accounting practice management software to perform their accounting tasks.
Support staff: These staff members perform non-core tasks in the accounting firm, such as administration, HR, IT or marketing.

What is the best structure for an accounting firm?

These are the best accounting practice structures that are commonly used:

A functional structure: A traditional accounting firm structure, where the firm is divided into functional departments (e.g., audit, tax, advisory), each headed by a manager or partner. This structure is suitable for medium-sized accounting firms with specialised services.
A divisional structure: If your accounting firm offers a wide range of accounting services or specialises in many clients, consider dividing your accounting practice structure into divisions based on service lines.
A matrix structure: combines functional and divisional accounting firm structures. Employees in this accounting practice structure belong to a functional department and a division, facilitating flexibility and expertise sharing.
A flat structure: This accounting firm structure is more suitable for smaller firms with fewer hierarchical levels, but it still should encourage the promotion of open communication and collaboration.

Top tips for designing accounting practice structures

This section dives deep into other considerations when creating your accounting firm structure.

Establish clear roles and functions

When designing the best accounting firm staff structure that suits your needs, you should start by clearly redefining the roles and responsibilities of each core area and function role, including partners, managers, accountants, and support staff.

Having well-defined roles in your accounting firm staff structure should create a clear reporting hierarchy and equip you to scale as your accounting practice grows. Your accounting workflows will be enabled to be quick and seamless without the need to rethink your accounting practice management software or internal processes.

In this step, consider what your future accounting firm will look like. Are you designing an accounting firm structure that can withstand change? Accounting industry changes that may move the needle could be regulatory changes, new accounting service needs or technological advancements, such as accounting practice automation.

You can also consider long-term sustainability by planning for leadership succession at this stage. Learn more about identifying the next generation of leaders in our article: accounting firm succession planning.

Achieve the right balance: Centralisation vs. Decentralisation

When designing your accounting firm structure, you'll need to decide the level of decision-making authorities at different levels of your accounting firm.

Centralisation and decentralisation are the two different models of working for an accounting firm structure. They are defined in the following way:

A centralised accounting firm structure is where higher positions, such as partners or directors, make decisions at the top.
A decentralised accounting firm structure is where decision-making authority is dispersed across the various levels of the accounting firm with the aim of greater transparency and accountability.

Enhancing your communication

Encouraging open communication can ensure your team works better in your new accounting practice structure.

To ensure your accounting firm structure redesign benefits your workplace culture, consider hosting regular team meetings and workshops or adopting accounting tools to encourage collaboration, such as workflow management software for accounting practices.

It would help to consider how changes will be communicated to your accounting practice clients through a communication strategy. For more on this topic, please read our article: marketing for accountants.

To learn about communication as a soft skill in day-to-day accounting operations, read our article: Communication skills in accounting practices.

Adapting and evolving: flexibility in accounting firm structures

Remember, there is no one-size-fits-all approach to accounting firm structures.

In the years ahead, it is essential to remain flexible and open to adjusting your accounting practice structure as the firm grows and changes over time.

Using software for accountants to support your organisational structure

Remember that the key to a successful accounting firm structure is to ensure it aligns with your firm's unique needs and strategic goals.

You should regularly evaluate the effectiveness of your accounting firm and be prepared to adjust as necessary to ensure that you are constantly optimising the efficiency of your accounting firm as it scales and grows.

Embracing accounting practice management software can support your new accounting firm structure by streamlining operations and processes and increasing productivity.

Workflow management software for accountants is one aspect of accounting practice management software that aids accounting firm structures. Accounting workflows can help grow your firm, manage your workload effectively, and guarantee that every accounting firm client gets the best service possible.

We are happy to help accountants looking to redesign their accounting firm structure by advising them on workflow management software best suited to their needs.

So, book a demo or contact us today to see what will work best for your accounting firm structure.