Choosing the best accounting software can be an important decision for any business owner. Even if you choose the right software when you start your business, with time, you might realize that it’s not the right accounting software anymore. Changing accounting software is a very delicate task and can affect your business operations, so it’s important that you have a plan in place before switching.
There may be many reasons why you might want to change your accounting software. For example:
- Your current accounting software is no more extended to meet your needs.
- The need to manage multiple currencies.
- Lack of real-time access to financial data.
- The existing software does not support online tax submissions. (HMRC’s MTD)
However, most business owners try to stick to their current accounting software unless they are forced to change by external factors (Ex. HMRC’s MTD) because switching can feel like chaos.
Is switching accounting software chaos?
All changes need time, effort, and motivation to keep them on track. Even if so, having a proper plan in place before switching can make your life easy.
It would be best to do your research, speak to the experts, and select the right accounting software for your business.
Below factors can be considered when making that decision.
- Cost vs Benefits: It would be best to be sure that your new software would provide better value for money than your current software.
- Functionality, usability, and technical fit: It should meet the needs of the users and be user-friendly.
- Scalability: The software needs to be flexible enough to change and grow with your business.
- Integration: Integration is critical in today’s accounting systems. Is automatic bank feed available? Does the software Integrate with your payroll service CRM and EPOS? What about your payment gateway? These are few questions you need to ask.
- Reliability and security: This is another essential factor you would need to drive your concern. You need to guarantee that all your data is safe and understand what would happen in a system breakdown.
- Services and support: You need to check the provider’s support services (Speak to your accountant/ Existing clients). Because it’s no good having fantastic accounting software if you are not getting good customer service and support when needed.
You also need to decide if you “do it alone” or get the professionals within. If you have an existing accountant, they will be able to help you throughout the process. Expertise is always beneficial to get the setup done right.
When to switch to new accounting software?
The ideal time to move your data to the new accounting software is usually at the end of the financial year. But this does not signify that you cannot switch mid- financial year. Anyway, before you import your data to the new software, you must conduct several checks and determine any errors in the current system.
Should I move my old information across to the new software?
Not necessarily. One of the first steps in switching to a new accounting system is entering your opening balances. Opening balances are your balance sheet items like the bank balance, Accounts payable, and Accounts receivable amounts on the last day of your financial year.
However, if you decide to bring in historical data, you should import them to the new Accounting system. This can get complicated, so if in doubt, reach out to an accountant for help.
What challenges might you face when making the switch?
- Insufficient quality data in your current system: If your data in the current system are not clean and tidy, you need to fix this before pass over to the new system. A new software won’t fix that, and this is the perfect time to do it. It will ensure that the information you bring into the new system is clean and accurate. You can fix it yourself or either get an Accountant/Bookkeeper to do it for you. In addition, there can be a situation where the opening balances are not ready. It could be that the bank wouldn’t reconcile, or you haven’t finalized the debtor and creditor balances. Again, you need to get your records up to date before moving your data to the new system.
- Deciding what data to Import: One of the Important steps in switching is setting up the correct chart of accounts because it affects two essential aspects of your business: The accuracy of your records and your business reports. Secondly, you can import your contact list (Customers and Suppliers), payroll information, and Inventory lists.
- To learn and understand the new software: A software change is no small job. You need to invest enough time to know the new system if you want to do things right the first time. If you have an existing accountant, they will surely guide you on how to use the software, but if not, it’s best to reach out to the software provider or find a bookkeeper who can provide you with training on this.0
When to go live?
You need to check if your trial balance, balance sheet, profit and loss, debtor, and creditor reports match the old and new systems. If any discrepancies arise or accounts don’t check, you will need to fix them. When everything matches, you’re able to go live.
Managing ongoing Improvements
Review the implementation and use of the new accounting software after one month. Check if it has met all your expectations. Contact your accountant to talk through any difficulties you have faced or need any further guidance on how to do specific tasks.
Check for new updates on the software and see what improvements can be made next in your business to do things better.
If you want to change your accounting software and need any advice or guidance on where to start, please feel free to call us on 0203 0111 898, and we will be happy to help.