Considering migrating to a new and enhanced accounting system for your business?
Maybe your current one no longer meets your needs as an expanding company.
It could be that you need to bring more users on board to collaborate quicker and much more efficiently.
Or simply, you might not be happy in general with the support, features or integrations of your current system and have finally found an alternative that’s more intuitive with your needs.
Whatever the reason for your system migration – moving your data to a different operating system doesn’t have to be as troublesome as it seems, as long as you prepared.
With the right approach and steps in place, potential barriers to a smooth migration process can be removed.
Here are some key factors to consider being diving into your accounting system migration.
Start by asking yourself these vital questions.
1. Is your data migration ready?
It’s naturally advantageous if you can try migrating onto a new system at the start of your accounting year.
That said, if you’re partway through the year, the benefits of migrating onto a better system can outweigh the costs of running two systems in part over the course of an accounting year. The more critical point than ‘when’ is ‘whether you are ready.
Naturally, the size of the business determines the impact and likely timeframe required in migrating. Solopreneurs or freshly established small businesses may be able to readily do so within a couple of weeks, whereas given the volumes, touchpoints and people involved, the larger organization will require longer and broader planning.
Irrespective, the critical point is that your data at the time of migrations (i.e., when you go live on the new system in generating sales invoices, etc.) must be as clean as possible. In a nutshell, can you look at your balance sheet at a particular point in time (migration date) and say that your assets accurately represent what you own, and your liabilities accurately represent what you owe.
The most critical area is generally always our short-term trade receivables and payables which we need to manage day to day and reconcile to what is coming in and out of our bank accounts.
To put it simply, unless you are migrating over historical bank data from before you go live onto your new system, that it is much harder to reconcile open items in the new system.
Inherent to this also is maintaining accurate GST records for regular compliance reporting.
Hence, it’s important to use migration as an opportunity to clean up your trade receivables and payables in particular and ensure they truly represent what you are owed and what you owe in the short term.
DAS ourselves have seen cases of businesses moving open sales invoices from one system to another which are several years old.
If your data is clean, in general, the time you need to keep your legacy system open and run in parallel will reduce and minimize duplicate work.
Consider it like moving houses – a good spring clean before you move will save you endless time and stress in the end.
2. Sequence your plan and priorities.
Prioritize what elements of your finance and operations you need to migrate first.
Naturally, you must ensure you are moving over the correct cash bank balances as a start, including accounts like PayPal also, and that your bank data feeds are then in place. You must be managing and reconciling accurate bank data.
Next up, it’s important obviously to be collecting cash so you can pay short terms essential like payroll and key suppliers. Before you jump straight into invoicing, ensure you’ve got accurate and complete customer contacts data moving over without duplication.
People generally send invoices via email now, so having the correct email addresses is almost the most important part of customer data. Once you’ve got that in place, then you can confidentially keep invoicing your customers.
Due to the privacy and time-sensitivity of payroll data, this should also be top of the list and require careful planning and thought.
Non-trade or cash elements of your accounting, like accrual and prepayment journals and fixed assets, are less critical and can be managed thereafter.
A finally, don’t forget your legacy data, ensuring no data is left behind, it securely and safely backed up and most importantly accessible depending on what type of system you ran on.
With online software, we traditionally lose access when we stop using it, so think of the format and accessibility of historic data.
3. People are the key.
As much as we’d like new and improved software to be a simple plug and play, the reality is often that we only scratch the surface in terms of getting full value out of the software you choose.
In relation to accounting, unless you’ve got rock-solid data capture processes on the front end, the rest of the process is broken – garbage in, garbage out.
The bigger your organization the more people are likely involved in the data capture processes into the accounting system, whether it be staff expenses or inventory management.
Hence training and onboarding are the key drivers of an accounting system migration success.
So, while the software you are moving to is providing you benefits, use the migration process as an opportunity to change the whole dynamic of your people process – so that things are simpler, better and more automated.
This needs to be built into the planning phase as it will dictate who needs to be involved in your migration project and when. Some companies reserve this for the very last step of the transition phase. But there’s plenty of benefits of starting early on.
One thing to consider is appointing software champions in the business who will take on trainer roles, or in larger companies, train the trainer roles.
As an example, you can select different people to specialize in different functionality or modules of the system and empower them to embed it for optimal use across your team.
Staff expenses are a classic case – it often drives both staff and finance teams nuts and is frequently a very inefficient use of time across the business and often for not significant amounts.
Migrations projects need to be a team sport, not something the finance team cook up in the dark then roll out one day to rest.
The move to a new accounting system by no means should be an unwelcome disruption to your daily business operations.
But what happens if you don’t even know where to start with choosing a better accounting system?
- What makes one accounting system right for your business over another?
- What new technologies should your business already be using to streamline sales and supply chain activities?
- How will an accounting system positively impact your cash flow?
Regardless of whether you’re a CFO of an international organization or micro-business owner – this is webinar is where you need to go and get those questions answered.
Together with Enterpryze, we at DAS will be hosting a free session to explain Digital Transformation: Key Factors to A Successful Accounting System Migration on the 24th of June at 4:00 – 4:45PM Singaporean time.
Seats are limited, so book yours here.