I encounter a common theme when working with firms: frustration with accountability. Too often, people are unwilling to take responsibility, and others are unwilling to hold them to account. This isn’t a simple issue to solve. It’s partly cultural. It’s also often a result of using the wrong performance measures, or a complete lack of an accountability framework and process.

Why Accountability Is So Difficult in Accounting Firms

Accountability is a widespread issue in firms, where partners and owners frequently wear three conflicting hats:

• Owner – focused on profitability and performance
• Manager – focused on team delivery and internal systems
• Professional – focused on client relationships and service delivery

These roles often conflict. A professional might avoid difficult conversations with clients, while an owner or manager sees such conversations as essential, particularly around pricing or overdue payments.

The Case for an Accountability Framework

The solution lies in implementing a clear accountability framework across the firm. This starts with setting performance measures that actually support the desired outcomes.

A key principle is that every performance measure must be within the individual’s control. For example, many firms track productivity as a core performance metric. But in reality, most team members can’t directly influence their productivity—it depends on factors like job allocation and the amount of non-billable work required.

Aligning Performance Measures with Control

A more effective approach is to hold team members accountable for:

• The number of hours spent on specific jobs
• Meeting job deadlines

These are factors they can directly influence. Within a well-structured accountability process, staff performance is assessed at the end of each job, with clear feedback provided.

If a job overruns, the team member must notify their manager before exceeding the target. This encourages ownership and creates opportunities to adjust or solve issues in real time.

Accountability for Senior Team Members

At the senior level, many firms still struggle with accountability around:

• Work in progress (WIP)
• Debtors
• Billing and write-offs

While moving to fixed fees and monthly payments can dramatically improve WIP and debtor management, not every firm is ready to make this shift. Firms must implement a more rigorous, consistent review process regardless of billing structure.

The Monthly Review Process

WIP and debtor balances should be reviewed at least monthly. For older or larger balances, a specific action must be:

• Agreed upon
• Assigned to a responsible person
• Given a clear deadline for execution

A practice leader should follow up to ensure action is taken. If the action doesn’t happen, a new action must be agreed upon, ensuring continuous follow-up and progress.

The Missing Piece: Consequences

Many firms falter because there are no consequences when agreed outcomes aren’t met. Yet without consequences, accountability lacks real impact.

Some larger firms use financial consequences, such as withholding draws or implementing differential profit shares based on performance. These systems can work, but must be carefully managed to avoid division.

In some cases, peer pressure is enough to drive change. However, in many firms, a consistent consequence for underperformance is necessary to drive accountability and improve outcomes.

Key Questions for Your Firm

To begin improving accountability in your firm, consider the following:

• What are the right performance measures for our firm?
• What should be our accountability process, and who is responsible for managing it?
• What should be the consequences if the agreed performance isn’t achieved?

An external adviser or chairperson often provides the objectivity and structure needed to bring these processes to life. If you’d like support building an accountability framework in your firm, feel free to get in touch—we’re here to help.

David Smith conducts firm reviews and facilitates the development of strategic plans and business plans. Contact David at [email protected] to explore how he can help your firm.