The key to getting the right accounting software for your business is to identify exactly what you need, do plenty of research, speak to the experts and select wisely.
Time and again we hear that businesses, when looking for bookkeeping software solutions, find something that looks great and get so excited that they take the leap, spend a lot of time and money trying to get it working, only to find that the product does not fit their purposes.
There are some great accounting systems in the marketplace that can fit every need, but businesses need to research and investigate their suitability to make sure they are fit for their needs before taking the plunge. Once a decision has been made, the implementation process and staff training become the ultimate measure of success or failure.
To make this process easy, we have compiled a guide with everything you need to know about planning a good implementation so that your business get the best results possible. However before you implement any new system, you need to prepare, research and have a clear plan.
A little prep-work goes a long way
Make sure you’re prepared before you start migrating to a new accounting system – complete this checklist:
- List any problems with your current system or processes that you want to fix with the new system e.g. “automate invoicing”, “automate debtor reminders”, “get better reports” etc. Keep it simple and specific;
- Prioritise and define what you want from the new system, separate the ‘must haves’, from the ‘would be greats’ to the ‘looks cool’ bonus features;
- Decide who needs to access the new system (eg owner, bookkeeper, accountant, manager) and what level of access they need;
- Prepare a list of your current processes – what don’t you need to do anymore, what could be improved, where are the wasted efforts occurring;
- Decide on a changeover date, give yourself plenty of time as changing your accounting system can be a complex process;
- What information do you want to bring across into the new system – do you need all (or any) historical data, would it be better to just start afresh;
- List out the reports you want from the new system – what information do you need to make your business work better;
- Set a specific date for closing off the old system;
- Schedule plenty of time to research and learn the new system.
To ensure a smooth and efficient transition, don’t skip any of these steps.
Now you’re ready to start doing the work so here’s our checklist of what to do:
Step 1 – Your chart of accounts
This is potentially one of the most important steps. Your chart of accounts determines how your profit & loss and balance sheet will be categorized and presented. If your business doesn’t have the right layout to suit your needs, you won’t get a clear picture of how your business is performing.
Start by mapping out what income, costs, assets and liabilities you want to see on your profit & loss, balance sheet and sales reports. If you want to get your numbers right, it all starts with your chart of accounts. If you are unsure about what this might look like for you, discuss this with your bookkeeper, accountant or other financial advisor.
Step 2 – Define a cut-off date
Choose a suitable date – ideally at the end of an accounting quarter or financial year – as the change over date. Make sure you allow enough time for the software transition. Depending on the size of your business, the training and full transition can take several weeks or months so make sure you allow enough time.
Step 3 – Clean up your records
Bad, inaccurate or useless data is one of the biggest causes of problems when transitioning to a new system. If you know there are inaccuracies in your books, wrong transaction coding or irrelevant information, fix this before moving over to the new system. As they say “garbage in, garbage out”. This is the perfect time to start afresh and make sure that the information you bring into your new system is clean, accurate and relevant.
You can either fix it yourself or get an accounting professional (accountant or bookkeeper) to do it for you.
Step 4 – Close off your old system
Once you’ve decided on your cut off date and cleaned up your records, close everything off. Get all your invoicing and back reconciliations completed and only migrate once you are happy this has all been done.
Step 5 – Match your old system to your tax return
Run a trial balance in your old system as at your last financial year-end and compare the figures to your tax return for the same year. If there are differences fix them. If you cannot manage this yourself you may need to speak to your accounting advisor.
Step 6 – Decide what data you’re importing
Now that all your data is looking good, it’s time to transfer it to the new system but make sure you know what data you are bringing in first. Start with your chart of accounts, followed by contacts (clients and suppliers), staff and payroll information and any inventory lists.
The best accounting systems have good tools for migrating or importing data. Use them but most importantly understand what the format needs to be before importing. Test that it works by importing a few rows of data first to check your format works.
Make sure your aged sales and purchases agree to the old system and that you’ve brought in the correct staff leave and entitlements.
Step 7 – Decide between importing historical data or entering trial balances
One of the biggest decisions will be to decide whether to bring in historical data or to start afresh with opening balances. This can get complicated so if in any doubt, ask your accounting professional to manage it. Don’t attempt to do this by yourself or you could just create a bigger mess for them to fix.
If you’re opting to enter opening balances, add them in this step. To ensure the accuracy of this information get your accounting professional involved.
Step 8 – Final check
Check that your trial balance, balance sheet, profit & loss, unpaid sales and purchase reports all match between the old and the new systems. If you find any discrepancies or accounts that don’t match you need to fix them. When everything matches you are ready to go live.
Step 9 – Connect your bank feeds
When you’re ready to go, turn on your bank feeds to bring your bank transactions from the migration date onwards. If you don’t know what bank feeds are, ask your bookkeeper. They’re one of the biggest time savers in online accounting and all the best accounting software packages offer this feature.
Step 10 – Final check
Run in parallel – Run both systems in parallel for a period of time. Depending on the size and complexity of your business, this could be a day, week, month or quarter. Running the two systems in parallel will highlight any differences in workflow and results.
Once you’re ready, roll it out to your team – Ensure you are at least 90% there before letting your team, contractors or other stakeholders use the new system. If things are still being finalized don’t allow anybody else to use the new system as it could jeopardise the changes and data quality you’re implementing.
Schedule plenty of learn & test time – Schedule learning slots in your diary. The more you know, the more you and your business will get from the new system. You’ll also learn tips and tools that will make a massive difference to your cashflow, processes and overall profitability.
Good accounting systems are super-intuitive and easy to learn. They offer good on-demand tools for learning and also access to a support team.
We hope this guide is helpful to you to switch accounting systems successfully. If you’d like any assistance with researching, testing or implementing a new accounting system, give us a call. This is what we do!
1300 852 575