9 simple steps to successfully swap your accounting system

Your accounting system is a critical component in the way you manage your business. If you’re current system no longer meets all of your needs, it’s definitely time to consider migrating to a new one. Migrating from one accounting system to another, depending on the size and nature of the business, however, can be a complex and difficult task requiring plenty of advance planning.

The first thing you need to do is select the most appropriate accounting software for your business. There is a wide variety of options in the marketplace, all designed for businesses of all shapes and sizes. A retail business with revenues of $200,000 per year will have vastly different accounting needs to a business that has an annual turnover of $20 million. Upgrading your accounting system may be part of a larger ERP implementation project.

Selecting a new accounting system

The software you select will greatly affect how you track and manage your revenue as well as expenditure. A system that fails to do the job adequately will impact the performance and effectiveness of your business. Be prepared to put some time and effort in evaluating a new accounting system. It is important to get it right.

Start your evaluation by listing any problems or issues you have with your current system that you want fixed. Prioritise the list of functions and features you want from the new system, ensuring you distinguish between features that are essential and those that are nice to have. Map out your existing processes, i.e. how do you do your invoicing, payroll, purchasing etc. Highlight where improvements can be made and inefficiencies removed. Decide who needs to have what access and what level of access.

Request feedback and input from people who use the current system such as your bookkeeper, they may have useful advice on what improvements or new features should be added. Seek advice from your accountant. They will have a good understanding of your business and are well positioned to recommend the most appropriate accounting software for your business.

The 9 simple steps

1. Set a date:

Set a convenient date well enough in advance so everyone in the business and your accountant are prepared for the migration. Depending on the size and complexity of your business, it can take weeks or even months to fully migrate from your old system. Choose a date and timing for the final switch over to the new system when it will cause the least disruption to the business.

2. Your chart of accounts:

A chart of accounts is a numbered list of the accounts that comprise a company’s general ledger. Essentially, it is a filing system for categorising a company’s accounts as well as classifying all transactions according to the accounts they affect. This step is important as it can influence two aspects of your business accounts:

  • The accuracy of your records – which can lead to unexpected tax bills and other liabilities.
  • The accuracy of your reports

When creating your chart of accounts, it is a good idea to confer with your bookkeeper or accountant.

3. Extensive training:

Ensure everyone who needs to use the new system is trained extensively and can perform all the tasks they need to perform. Without sufficient training and familiarity, the new system will become plagued with errors, impacting business performance and the accuracy of business reports.

4. Clean existing data

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.

5. Backup existing data:

Back up your data before you migrate, ensuring it is readily available and able to be restored. Otherwise, you run the risk of losing important information if something goes wrong with the migration.

6. Test and trial new system:

Import some data into the new system and trial the new system to ensure the new features and reports are working as expected.

7. Switch over to new system:

Once your data is accurate and everything is working properly, it is time to migrate the data from the old system to the new system. Most software packages provide a range of tools and instructions that allow you to easily migrate and import data.

8. Run in parallel:

Allocate some time to run the two systems in parallel. This will highlight any differences in workflow and results.

9. Working with a partner:

For larger businesses, that need to use more sophisticated accounting software, may not have the necessary technical skills to implement the new system and handle the data migration. You will need to turn to the services of a consulting, IT or professional services organisation to help you manage the migration.


When to change an accounting system?

When a company is struggling with reporting and cannot analyze its operational data and are dependent on lengthy spreadsheets, then it is an indication that the accounting system needs to be changed.

How to choose an accounting system?

As an user, you first need to consider both your accounting skills and needs. You also need to pay attention to add-on features that such a software offers.

How an accounting system helps in data management?

An accounting system helps in creating data related to various aspects of a business such as sales, purchases, taxes, inventory, and projects. Such a software uses both manual and automated sources to collect, store, retrieve and process data.

What reporting options does an accounting system offer?

An accounting system can generate customary reports which are used in business, including income statements (profits and loss), balance sheets (assets and liabilities), statements of cash flow, payroll summary, accounts payable, and accounts receivable.

How accounting software helps to monitor time and job management?

Accounting software meant for integrating time tracking software enables managers to get a clear view of a company’s workflow activities and they can offer a clearer look on all important business operations. This helps the management to make wiser decisions.

Which is the best accounting software for SMEs?

PathQuest BI is an accounting system using which SME owners can easily navigate their business, stay updated about each move with live notifications and offers 100% security to financial data.

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