Structuring a modern accounting firm

The way most accounting firms have been run for decades isn’t right for the modern practice. Yet, many firms are still proportioning their managers and staff and structuring their teams based on guidelines that included desktop systems, yearly meetings with clients (and charging calls by 15-minute increments) and services that could achieve differentiation by simply being done right.

In the early 2000s, an efficient firm commonly had a ratio of 5:1 (5 accountants to 1 partner/manager), in the same office. Today, the modern accounting firm’s ratio is anywhere from 7:1 to 15:1, and often includes multiple locations.

Along the road, you have probably made reactionary changes to your team structure to improve efficiency, cut costs, or cope with personnel changes. But this type of minor tweaking can do more harm than good and negatively affect the way your team works together. If your strategies, goals, processes or services change, your structure needs to keep pace. This requires more than a casual readjustment—you need to redesign how the roles and functions integrate within your team to suit your new direction.

As our business strategy has evolved, our approach to hiring has as well. Our latest hires have all been from startup companies, as their scrappy approach to growing the business was just what we needed to help move from an old-school bookkeeping outfit to a modern, scaled, services business.
Keith Mueller — BKE

Redefine your functions & roles.

You need to take an entrepreneurial approach to your strategy, and doing this requires you to consider core areas and functional roles that your team may not currently include. Your accounting firm is a business, so run it like one.

If you’re not convinced of the necessity of this step, consider whether your current structure allows for work to flow through your team from commencement to sign off as quickly and seamlessly as you would like. Ask yourself whether you could effectively take on twice the number of clients you have now without needing to change all your systems, processes, and technology. Look at the way your team communicates and see if and where any issues occur. This redesign will ensure information moves through your organization with ease—your team will work better together, it will minimize the disruptions from unplanned events like the sudden departure of a staff member, and your practice will be well-equipped to scale.

We made the decision to not just run our practice like a business, but like a rapid growth business. For us, this meant moving from an organization of generalists who could do a bit of everything, to becoming a company of specialists. While the majority of our team are still accounting professionals, these new roles have allowed us to scale the business at a much more rapid pace.
Kenji Kuramoto — Acuity

Identifying gaps and problems.

Make a note of every change that has been made to your practice in recent years, especially those that you’re implementing as part of this transformation. Consider each function in your team and the individuals working in each of these areas. Take the time to speak with each team member to gain a thorough understanding of the problems they deal with, where their bottlenecks occur, and what (or who) takes up their time.

Pick a process and identify how the team is working. Has the process been redesigned in the past five years? Have the team members changed? Have the systems used in it changed?

For example, your client onboarding process should have changed dramatically in recent years. While before it was mostly manual and collaboration between your team members was minimal, nowadays it can be automated and run more efficiently. This has an impact not only on the process itself, but also on the skills you require your team members to have and the tasks they need to perform.

Also, if you have added services to your firm since the last time you revisited this process, it is likely they should be included in some form or another in the onboarding process (are you offering those services to those clients? Are you collecting the right information?).

Efficiency begins with defining roles. If everyone is overlapping in their work, it hinders efficiency and overwhelms the client. We have found that process mapping each job in the company has allowed us to find gaps and define clear roles.
Jessica Daley, Xcelerate Business Solutions, LLC

Your structure is yours.

With an in-depth knowledge of every aspect of your team, you should be able to formulate an improved organizational structure tailored to you, your team and your client needs. Don’t disregard the fact that new technologies allow for real-time collaboration and communication, and have vastly improved the visibility you can provide throughout your team, unlocking countless options for you. Consider the pros and cons of flattening your structure, and significantly changing the number of staff you have for each manager.

There is no longer a one-size-fits-all model that existed for decades. Only you can determine what ratio and design will work for your team. Because of the new landscape of the industry, you can, and should, adopt structures that weren’t possible previously. If you are going to grow you will need to arrange your team in a way that will allow for you to scale rapidly without any of your processes breaking. 

This article is an excerpt from The Growth Playbook. You can download the complete playbook for free here

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