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Migrating to an Online Accounting software – 5 key steps

Posted on 24 February 2013

How to migrate to an online Accounting Software?

I hope the following point will help those who are thinking of moving to a cloud based Accounting system like Clear Books, Xero, Free Agent etc.

1. Firstly, search the right online Accounting Software for your needs – Get an expert’s advice before implementing a new system.

Do not always go for the cheaper option or a recommendation by a friend. Many online accounting packages have emerged in past 5 years. They all have their merits and limitations. They have different history on how they started sometimes by just offering online Sales invoices module and later becoming into a full bookkeeping system. Some are originally from USA or New Zealand so they don’t necessarily fit for every UK business.

2. You may not save time in every Finance task by having an online bookkeeping system.

Get an expert to look at the existing business operations and how the current recording system works. While there are efficiencies to be gained, there can also be benefits that you will lose when move to a cloud based system. Certain finance procedures may be working better for you using an existing off-line system. Everything you post, will rely on internet speed. Clicks go from one web page to another and sometimes, the process can be slow and frustrating.

Uploading data through csv/excel might be quicker but yourself or your staff may not be skilled enough to run that process.

3. Allow for some time and cost to incur in the migration process.

There are many things that need doing in the initial setup process.

i- There should be a start date- if your business has 5 year’s history you may not want to post everything to the new system. Go with the last submitted Final Accounts to get the opening balances figures, the Trial Balance, the Balance Sheet.

ii- reconcile data, the bank, Aged Debtors and Creditors

iii- ensure all required Nominal codes and project codes are set

iv- Accounting periods, VAT periods, VAT schemes etc. are set

v- Asset register, if required, is set with the right depreciation rates.

vi- Sales invoice Template is customised with your Logo and style

The list will depend on your own business nature.

Again, if you are not good with Accounting, hire someone to do it and allow a reasonable amount of time and costs for everything to get set up properly. Based on size, this can be anywhere from £500 and couple of days to £2000+ and couple of weeks or over.

4. Test the migration by checking the balances  

If migration is done in the accounting year Apr to Mar 2013, you should have balance sheet for Mar 2012 Stat accounts matched with your system now.

Compare sample information from your previous system e.g. main supplier’s statement, main customer’s statement, bank balances etc.

5. Start using it – but get assistance

There is a learning curve involved like anything. Do not assume everything will go as easy as the advertisement predicts!  There are often more than one ways of posting things. So play around or get advice on the most efficient way suitable for your business.

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