Document management for accounting firms: folder structure, naming and retention

The four-level client folder structure

Accounting work belongs to an entity and a year, and the people who do it think in client groups. A folder structure that follows those three facts, in that order, is one the whole team can file to without asking.

The Permanent folder holds what outlasts any one year: the constitution, the trust deed and its variations, share and unit registers, and standing minutes. The group folder holds only what covers several entities, such as a group engagement letter or the family group structure diagram. Anything that belongs to one entity goes to that entity.

A worked example: the Schurr group across two years

The DA & MR Schurr Family Group has six client records: Schurr Pty Ltd, the Schurr Family Trust, the Schurr Superfund, its trustee company Schurr Super Fund Pty Ltd, and Dean and Melissa Schurr. This is the group’s folder tree in September 2026, with the 2025 year finished and the 2026 accounts job under way.

During the 2026 accounts job, seven documents arrive or are produced. Each has exactly one home, and anyone on the team would put it in the same place.

The same layout gives each year folder one retention date. Schurr Pty Ltd’s 2025 company tax return was lodged on 12 May 2026, and the engagement ended there, so that service was complete. The firm keeps its record of the service until at least 12 May 2031, five years later. A review, objection or appeal within the engagement would move that date.

The company’s own financial records run on a separate clock. The Corporations Act requires them to be kept for seven years after the transactions are completed, so to 30 June 2032 for the 2025 year. If the folder holds the client’s only copy of something, return it to the client rather than destroy it.

A file naming convention for accounting firms

A naming rule only works if it’s short enough to remember. We’d suggest four parts, in this order, with a fixed list of document types the firm agrees once.

1. 01

   The year.

   The financial year the document belongs to, as four digits, so files sort by year. Use the year end your client’s return uses.

2. 02

   The document type.

   From the firm’s list: Financials, Tax Return, Tax Worksheets, Engagement Letter, Distribution Resolution, BAS. One name per document type, never two.

3. 03

   The entity.

   Exactly as it appears in Xero and Xero Practice Manager, so a search for “Schurr Pty Ltd” finds everything.

4. 04

   The status, in brackets.

   Draft, to sign, signed or lodged. The status replaces “final”, “final v2” and “USE THIS ONE”.

Emails are the exception: start them with the full date (2026-08-14), because the order of a conversation matters more than its year. Keep names free of slashes, colons and other characters some systems reject, and don’t use staff initials as the only description.

Where client email correspondence goes

File a client email in the entity and year folder of the job it’s about, at the time the job uses it. In the Schurr example, Dean’s question about a dividend went to Schurr Pty Ltd / 2026 / Tax, not to the group folder, because it concerns one company’s accounts.

In Australia this is more than tidiness. The TPB’s record-keeping obligation covers all advice received from the client and all advice given to them, and much of it arrives by email. A reply sitting only in one manager’s inbox isn’t a firm record.

• Save the whole message (.msg or .eml) so the sender, date and attachments stay together. A PDF of the email is fine as a second copy.
• If an attachment is a working document, also save it under its own name in the same folder.
• Use the group folder only for an email that covers several entities, such as a restructure discussion.
• File calls and meetings the same way, as a short file note: what was decided, by whom, and what happens next.

A correspondence register does the same job one level up: it keeps the email, call or file note against the client, so the history survives when a manager leaves.

Where signed documents go

A signed document lives in the same folder as its draft, and the signed copy wins. Rename it with “(signed)”, keep the e-signing provider’s completion certificate beside it, and move the unsigned draft to a Redundant Documents folder so nobody sends the wrong one.

Permissions: who can open which client folders

Set access by role and team, not person by person. A structure where everyone in client service can open active client groups, and a few folders are restricted, is easier to keep right than a hundred individual exceptions.

• Keep staff, HR and partner documents outside the client tree altogether, in their own restricted library.
• Restrict a client group only for a real reason: a conflict, a staff member’s own family, or a sensitive matter.
• Give contractors and offshore staff access to the groups they work on, and nothing above them.
• Remove access on someone’s last day, and review the list of people with access every year.
• In Australia, don’t keep copies of identity documents; the TPB doesn’t recommend it. Redact tax file numbers from anything you share, and destroy or de-identify TFN information once it’s no longer required.

How long to keep client records, by country

Two clocks run on every year folder. The firm’s clock covers its own record of the work, and usually starts when the service is complete or the client relationship ends. The client’s clock covers their tax and company records, and starts from the year or the transaction. If you hold the client’s records, the longer of the two is the safer date to review against. The rules below are general information, not advice for a particular client; check the regulator’s current guidance before you destroy anything.

Record retention in Australia: the TPB and the ATO

• The firm: section 30 of the TPB’s Code of Professional Conduct determination requires records of each tax or BAS service, showing its nature, scope and outcome, the information considered, and the advice received and given. Keep them for at least 5 years after the service is complete. It applies to services completed from 1 July 2025 for firms of 100 or fewer employees, and from 1 January 2025 for larger ones.
• After 5 years: the TPB doesn’t require you to destroy anything, but expects you to consider returning, de-identifying or destroying records, having regard to your arrangement with the client and privacy law.
• The client: the ATO asks businesses to keep most records for 5 years from when they were prepared or obtained, or the transaction was completed, whichever is later. Depreciating asset records run 5 years after the asset is disposed of.
• Companies: the Corporations Act requires financial records to be kept for 7 years after the transactions they cover are completed.
• Identity checks: the TPB asks for a record of proof-of-identity steps, kept at least 5 years after the engagement ends. Our client onboarding checklist covers what that record holds.

Record retention in the UK: HMRC, Companies House and the MLR

• Companies: HMRC requires records for 6 years from the end of the last company financial year they relate to. It’s longer if a transaction spans several periods, an asset lasts more than 6 years, a return was late or a compliance check is open. The Companies Act minimum for a private company is 3 years, so HMRC’s rule is the one that bites.
• Self-employed and partnerships: at least 5 years after the 31 January submission deadline for the tax year. A 2022–23 return sent online by 31 January 2024 means keeping records until at least the end of January 2029.
• The firm: under regulation 40 of the Money Laundering Regulations 2017, customer due diligence records are kept for 5 years after the business relationship ends. After that, the personal data must be deleted unless another law, legal proceedings or the person’s consent says otherwise.

Regulation 40 changes how a UK firm’s folders work. It sets a date by which the personal data must go, where the other rules only set a date after which records may go. Keeping identity documents in a separate restricted folder per client makes that deletion possible without touching the tax records.

Record retention in the US: the IRS

• The client: the IRS’s general period is 3 years. It’s 6 years if unreported income is more than 25% of the gross income shown, and 7 years for a loss from worthless securities or a bad debt deduction. Employment tax records are kept at least 4 years after the tax is due or paid.
• The firm: section 6107(b) of the Internal Revenue Code requires a preparer to keep a copy of each return, or a list of names and TINs, for 3 years after the return period closes.
• Returning records: Circular 230 section 10.28 requires a practitioner to return a client’s records promptly when asked.

Record retention in New Zealand: Inland Revenue

• The client: Inland Revenue requires all records, paper or electronic, to be kept for at least 7 tax years.
• The cloud: Inland Revenue says that if you store records offshore, including in cloud computing, you or your provider need its approval. Check that your document system’s provider has it before you migrate.
• The firm: Inland Revenue’s record-keeping guidance doesn’t set a separate period for tax agents. We’d suggest matching the client’s 7 years for your own working papers.

Choosing document management software for an accounting firm

The four-level structure works in every system below, and AccountKit connects to all of them. The better question is which one fits the tools your firm already runs on.

How to set up or migrate to the structure

1. 01

   Write the template down.

   The year folder’s job types, the Permanent folder’s contents, and the group folder’s rule. One page, agreed by the partners.

2. 02

   Agree the document-type list.

   Twenty names or fewer. Anything not on the list goes to a manager before it gets a new name.

3. 03

   Build active client groups first.

   Start with the groups that have work due in the next quarter. Dormant clients can wait.

4. 04

   Start the new structure on a year boundary.

   New years go into the new folders. Leave older years where they are, in an archive folder, rather than renaming history.

5. 05

   Set access by role.

   Create the permission groups before you move files, so nothing inherits the wrong access.

6. 06

   Give every closed year a review date.

   The completion date of the last service in that year, plus your country’s period. Put the date in the folder name or your DMS’s retention field.

Mistakes reviewers find in client folders

• A folder per client but no group level, so a trust’s deed is filed under the company that pays its distributions.
• Group-level folders that collect everything, which means nobody can archive one entity’s year.
• Two names for one document type (“Fin Stmts” and “Financials”), so a search misses half of them.
• Signed and unsigned copies side by side with no status, and the unsigned one sent to the bank.
• Client email left in personal inboxes, so the advice behind a decision leaves with the person who received it.
• Identity documents and TFNs filed in the general tax folder, open to everyone, long after anyone needs them.
• The firm’s own retention date counted from the year end, not from when the service was completed.

How AccountKit connects to your document system

AccountKit sits over the document system your firm already uses, and that system stays the store of record. AccountKit doesn’t store the underlying documents, and your system’s permissions still apply. Every client and workflow task links to its folder in SharePoint, OneDrive, Google Drive, Dropbox, Box, SuiteFiles or FYI, with your naming left alone.

On the Professional and Practice plans, bulk folder creation builds a client’s structure from a template, beside document templates and PDF editing. From the Professional plan, relevant Outlook or Gmail mail can be captured against the client group, and e-signing through your own Annature or FuseSign subscription files the executed copy back. The document management page shows each step, and pricing lists what each plan includes.