9 Simple Steps to Switching Accounting Systems

We’ve seen it (and done it) too many times…

We research tools and systems to fix specific business problems, find something that looks great, build our hopes up, take the leap and then… we fall flat.

How many of us in business have downloaded the latest app, bought the latest gadget, signed up to the latest tool in the hope that it will be THE magic key?

Here’s a secret.

There’s no magic key. There are great systems that fit our needs, but they’re only ever as good as the implementation and learning effort we put into them.

So what exactly makes for a good implementation, that helps you get the results you need from a new business tool, specifically a new online accounting system?

We’ve compiled a guide with everything you need to know, based on what we’ve learned from thousands of customers over the last decade. The common questions, the stumbling blocks and what they wished they’d known before going ahead.

Why implementations of new online accounting systems (and software in general) fail

After looking at years of data, failure to implement a new accounting system always happens because of one or more of the following reasons:

• Bad quality data in your previous system – A new system won’t fix that. You have to role up your sleeves and tidy it up!
• Not enough time allocated to learning the new system properly – You allocate time to learning the basics but don’t make time to learn what gives you the results you need. Here’s what we’ve learnt: you won’t get to it later. The time is now.
• Failing to get your team aligned and committed to learning the new tool and use it the way it was designed to. Often what happens is you get stuck with everyone’s own agendas and their preferences… Which almost never lean towards learning something new and doing things a different way.
• Failing to list out what you want to get from the new software before implementation. This means you may miss out on certain functionality because you haven’t determined exactly what you need.
• Failure to commit to change – You kind of want to, but when comes time to change, you’re stuck in your old ways. This will be hard to admit, so we warn you: don’t waste your money if you aren’t fully committed.

A little prep-work goes a long way

Before you start migrating to a new accounting system, make sure you’re prepared and fully aware of what’s involved.

Complete this checklist (do not move ahead before doing this):

• List out business problems you want to fix with the new tool e.g. “reduce time spent on invoicing”, “automate reconciliation”, etc. Keep this simple and specific.
• List out what you want out of the new system, in order of importance.
• List out how much you want each person to see and do in the new system (if there’s more than one person accessing the system). Decide who’s your champion, the person who’ll make sure the implementation is done fully. This could be your bookkeeper or accountant.
• List out all your current processes.
• Desired changeover date.
• List out what information you want to bring across to the new system (we share below the right way to figure it out).
• List what reports you want from the new system, as in what you need to see to manage your business more effectively (this will have an impact on how you implement. More on this later).
• Schedule specific times for closing off the old system.
• Schedule specific times for learning the new system.
• Don’t skip any of these steps. If you do, you’ll risk losing money and precious time.

Have you completed all the steps above? Good. Now you’re ready to start doing the work. Here’s what you need to do.

Step 1 – Your chart of accounts

This is potentially the most important step of them all. Because it can influence two important aspects of your business accounts: the accuracy of your records (which can lead to unexpected tax bills and other liabilities), and the accuracy of your business reports. If your reports aren’t right you’ll be flying blind and that’s not good for your business.

A great starting point is to map out what you want to see in your Profit & Loss, Balance Sheet and Sales Reports. This will give you a good idea of how to structure your chart of accounts.

We’ve seen a lot of clients muck up this step and it’s very hard to fix. In our experience, it really pays to check with your bookkeeper or accountant.

If you want to get your numbers right, it starts with the chart of accounts. Check it carefully and get it right.

Step 2 – Choose a definite cut-off date

Choose a suitable date, preferably around a reporting time that makes sense for you (typically the end of a an accounting quarter or year). And make sure you give yourself enough time for the transition. Just remember that time will fly, so give yourself a few weeks or even a couple of months to complete the transition.

Step 3 – Tidy up your records in the previous system

Bad data is one of the biggest causes for headaches when you move over to a new system.

If you know there are inaccuracies in your books, bad transaction coding or complete messes around invoicing, contacts, items and other areas, you need to fix them before moving over.

Trying to start fresh without doing this is a huge mistake. Even the best software in the world will feel useless if your data is bad. It’s that simple.

So role up your sleeves and get fixing, or hire someone who can do it for you. This is another area where we see a lot of DIY disasters. So save some money and headaches by hiring an accounting professional if you don’t have the expertise in-house.

Step 4 – Close everything off in your old system

After you choose your cut-off date and tidy up your records, get everything closed off.

Get all your invoicing and back reconciliations done for your chosen reporting period. This impacts some of the steps below, so don’t attempt to migrate before doing this.

Step 5 – Get your old system to match your tax return

Run a trial balance in your old system as at your last financial year end and compare to your tax return for the same date. Find the differences and fix them. This might require a conversation with your advisor and some troubleshooting.

If you don’t do this you could end up with your old system, your tax returns and your new accounting system not being lined up. That could be a problem in the future that takes a lot more time and money to fix.

Step 6 – Decide what data you’re importing from the old system and start

Now that all your data is looking good, it’s time to bring it across to the new system. But you need to know what you’re bringing in first, as the order definitely matters.

Start with your chart of accounts (if you’re not setting up a new one from scratch), then contacts (clients and suppliers) and your inventory lists (if you have stock, virtual items or use inventory for faster service sales invoicing). Stop here for now.

Great accounting systems like Saasu have great tools for bringing in your data. Use them but most importantly understand what the format needs to be before importing. Try importing a file with just a few sample rows of data first to check your format works.

Then it’s time to either import or enter unpaid sales and purchases from the old system. You should only enter transactions from the date the previous system was closed off. They need to be the same value in the old system and the new so you have an identical starting point.

Step 7 – Decide between importing historical data or entering trial balances

The decision to whether bring previous years’ data with you, or opting for entering trial balances instead needs to be made with your advisor. Do not attempt to do it yourself.

If it makes sense for your business to bring historical data to the new system, then leave this to the professionals. Get a partner to do the migration as multiple financial years data can be tricky to line up between systems if you don’t know all the differences between the systems.

If you’re opting to enter trial balances, add them in this step. Make sure you also get this right. Again, it would pay to have an accounting professional check this for you, to make sure you’ve done everything correctly.

Step 8 – Final check

This is a final check before you move over to the new system for good. Check that your trial balance, balance sheet, profit & loss and unpaid sales and purchases reports match between the old and the new systems.

If there are any discrepancies, you need to fix them. When everything matches, you’re ready to go live.

Step 9 – Connect your bank feeds

After you’ve checked everything is ready to go, it’s time to turn on your bank feeds to bring your bank transactions from the migration date onwards. If you don’t know what bank feeds are, they’re one of the biggest time savers in online accounting (here are some details).

After you’ve activated them, delete all information from before the migration date as these transactions have already been handled. If you connect them a few days after switching over and transactions are missing for a specific period past the migration date, import those transactions in a csv file for the missing period.

Final Recommendations

Run in parallel

Run both systems in parallel for a period of time (could be a day, week, month, depending on your comfort level). This will highlight any differences in workflow so you can allow for them and learn how to handle them more efficiently in the new system. Once you’re comfortable with everything, turn off your old system.

Role out the new system to your team only when it’s completely ready

Don’t let your team, contractors or other stakeholders use the new system until you’re sure you’re 90% there with your migration. If you’re still working things out, don’t let anyone else touch it. This could jeopardise the change you’re wanting to implement, and we’ve seen situations where the team resists change for a long period of time, which can make your life more difficult than what it has to.

Schedule regular time to learn & apply

The more you know, the more you’ll get out of the new system. The trick is to schedule these learning slots in your diary and stick to them. It may seem like a nuisance but this is crucial. Not only will you become quicker at managing your books, but you’ll also learn the tips and tools that will make a massive difference to your cashflow, processes and overall profitability.

The good news is, good accounting systems like Saasu are super intuitive, easy to learn, and they offer good on-demand tools for learning. You’ll also get access to a support team, so it won’t be long until you’re a pro.

We hope this guide gives you everything you need to switch accounting systems. It doesn’t have to be a big job. It just has to be done right.

If you’d like to pick our brains, leave us your feedback on this post, or get in touch with our team directly. We’d love to hear from you.