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Thinking about changing your accounting software?
30 May 2022

When business owners think about changing their accounting system, they normally put it in the same category as changing their bank account … hard, time consuming with lots of set up required and probably lost information along the way. Because of this they stick with the same system they’ve used for years even if it’s antiquated, manual, costly and they’re thoroughly frustrated with it!

With Cloud Accounting systems such as Xero, there are many benefits to small businesses; speed, flexibility and automation to name but a few.

When is the best time to change?

The best time to move to any new accounting system is from your financial year end. This keeps it clean, gives you a clear cut off date and means that you have opening balances from your last set of accounts to enter. Even if you’re a few months into your year it’s often worth backdating things. That being said, you don’t have to wait until then. The move can be made at any time providing you have an opening view of your outstanding sales and purchases and your bank balances.

Things to consider

When moving from one accounting system to another a little planning goes a long way and will make the transition to the new system much easier. Think about what you need from your new accounting system before you start the set up. It might not be what you have now. You might want to include:

– Your own cost and sales categories
– Stock lines and inventory tracking
– Expenses tracking
– Project management

Cloud accounting systems like Xero are about getting up to date financial information for you not just the VAT man so make sure it gives you the visibility you need.

Should you add historical information?

We frequently get asked if people should migrate their historical accounts information into the new system. In our experience … this needs to be done with caution! There are systems that will do this migration for you but the data you are migrating must be cleaned up before the migration takes place. This is often where it goes wrong – moving across old data can often mean mistakes and outdated information are simply carried forward. As the saying goes ‘rubbish in rubbish out’!

We find it much more straightforward to start with a clean slate and simply enter conversion balances for the prior financial year. It’s the ideal time to clean up your data that is both free of errors and is up to date and complete. Historic information can easily be archived for reference and systems such as Xero allow you to enter high level comparative figures so that year on year financial reports can still be run.

At Your Support Team our Xero Certified Advisors are experienced in migrating clients from other finance systems and manual accounting processes. In addition, we can provide full Xero training as well as ongoing guidance so that you always have the support you need. If you’d like a copy of our ‘Getting Started with Xero’ leaflet or would like more information, please get in touch.