With the marketplace now being full of different options for bookkeeping software, we are seeing more businesses change their bookkeeping software and so this question becomes very relevant. Software options include Sage (various versions), Xero, Quickbooksonline, Kashflow, Freeagent and more.
There are also businesses out there not using a bookkeeping software that with ‘Making Tax Digital’ coming along that will need to start to use a bookkeeping software. So they will be transferring from either using a spreadsheet or from just handing their paperwork to their accountant to the year end.
So, when is the best time to change bookkeeping software?
The easiest time of year to do this is at the year end. So in the month before your year end, choosing your software and getting the software set up ready for use from the start of the new financial year. In that month before, you will be able to do most of the set up – however, you will only be able to put on your opening balances once you have completed the year in your previous software. When you put on your opening balances, you will enter all the outstanding sales invoices and purchase invoices which are outstanding at the end of the previous financial year.
If you are VAT registered, ideally the transition to a new software will coincide with the end of the VAT quarter. If this isn’t the case, you will need to run part of your VAT return on the old software and part on the new software and then having to manually add these together for that first VAT return.
Can you change your bookkeeping software mid year?
Yes you certainly can and we can do many of these transitions for businesses. However, it does take more time and will be a bit more involved to get the set up done. There is a decision to make as to whether you want to recreate everything for the year to date in the new software or whether to enter opening balances at the point of transition mid year and move forward from there.
How to do a bookkeeping software transition smoothly?
Unless you are a bookkeeper or accountant doing this all the time, it’s worth getting someone who is an expert in the software you are moving to do the transition for you. It will save you a lot of time in your businesses which you could be spending elsewhere. It is also really important to get this transition done correctly or it will affect the accounts being produced and you don’t want to find a mistake has been made which means that you have had an incorrect understanding of how well or not your business is doing until your accountant then identifies the problem following your year end.
To find the right person to help you, the software providers usually have a list of registered accountants and bookkeepers who use the software. For example, we are Xero Certified Silver Partners and appear on the list on the Xero website.
You may hear about software companies who do the transition for free. For example, ‘movemybooks’ provide a transition service for companies moving from Sage or Quickbooks to Xero and they deal with a lot of the data transfer and can import the last two years of your data into the new software for free. This is a great service which certainly helps. You will still need your ‘expert’ though to complete this process for you and to set up your software tailored to meet the needs of you and your business.
So when will you transfer?
Businesses can have their year ends at any part of the year which is the ideal time to change over your bookkeeping software. There are many businesses whose year end is broadly in line with the tax year at 31st March and so have their year ends coming up right now. So if this is you and you are thinking about changing software, now is the time to get organised and to make the change.
We are a bookkeeping practice and we help many businesses transition to Xero bookkeeping software and we also provide training for businesses owners to help them use their new software. If we can help you in anyway, please contact us on firstname.lastname@example.org or call Tel: 01462 455455.