Are you planning to move to a new accounting package? If the answer is yes then you will need to make an important decision. How much historical data should you bring across to the new accounting file?

The answer can have major implications if you are moving from one cloud accounting program to another. As soon as you stop the subscription for the outgoing program you will lose access to any historical data you don’t bring across. (In some cases you could switch to the lowest subscription, such as a cashbook plan, which can cost less than $10 a month.)

It is less of a problem if you are migrating from desktop accounting software. You can keep your historical data on hand using the old program.

Either way, you still need to decide how much old data you want in the new file. Start from scratch, the past seven years or every year previous?

While some businesses prefer to leave their data behind (‘it is messy, I want a fresh start’), most dread the thought of losing their historical data.

Let’s break this fear down to actual motivations. What is the value behind these concerns and do they justify the effort in transferring large amounts of historical data.

Reason no. 1: Tax compliance

Should you transfer seven years of data to stay compliant with the tax office? The short answer is no.

If you only need to save your data for compliance reasons then consider saving a copy of your old desktop file if you have perpetual licence (e.g. a Sage Accpac, MYOB or Reckon file). Or you can export the data into spreadsheets if you won’t be able to access it again because it’s in a cloud accounting program.

 

Reason no. 2: Management reporting

Again, this is probably not a good reason for transferring every single transaction. Ask yourself what reports you actually require and bring those summarised figures into the new system.

Typically, monthly P&L figures and annual full figures for up to three years are enough. Consider doing this with tracking categories/classes if required for your reporting.

The complexity of doing this does not depend on the size of your file. There are 12 journals in the year for any sized business.

 

Reason no.3: Operational needs

What data do you really need for your everyday operations? Most businesses refer back to a past invoice or bill to know:

  • Which customers ask for the same product each year?
  • How much has a customer spent with me in the past?
  • How much did I pay this supplier for that product?
  • When was this product sold and is it still under warranty?

Consider only transferring invoices and bills and not all financial information.

Yes, it complicates things a bit with getting your monthly and annual figures brought across, but those are technicalities that a good conversion expert can easily handle.

 

Reason no. 4: Auditing

This is the tough one. Often a full transaction history does simplify things for businesses that are audited regularly. Then again, often it is larger businesses that need to audit and they can afford the extra cost of transferring full transactional history across.

In other cases, I would revert back to considering other options for preserving this data, even if that is outside the accounting package in a spreadsheet.

 

What you get with free conversions

In Australia, Xero and QuickBooks Online offer free data conversion services from their main competitors. (Both offer conversions from MYOB and Reckon. QBO also offers conversion from Xero.)

Xero and QBO offer a free conversion including one or two years of transaction history and additional data for a small fee. Their data conversion tools are constantly evolving and the scope of data converted is constantly growing.

If you are moving from less common systems such as Saasu, Netsuite, JCurve, Great Plains, MYOB Exo, Sage or other popular or less well known accounting software, you will have to find other solutions to bring across your data.

In these cases, the effort of transferring your data will increase with the scope of the conversion, the volume of data, and the complexity of your particular file. You have to consider whether it is worth the cost.

 

Converting your data between systems is not an ‘all or nothing’ game. There are many options in between. If you are going to spend money on bringing your data across, best to think wisely about whether it is worth it and how you can make it usable.

Image Credit: Senses Data

 

Inbal Steinberg

Inbal Steinberg

Founder at ConvertworX
Inbal Steinberg is a cloud solution specialist and cloud integrator with Convertworx based in Melbourne, Australia. With over 20 years experience as an IT systems analyst, Inbal spends her days reviewing business processes, data flows, and finding the best cloud solutions for clients. Backed by the team at Convertworx, Inbal is the go-to person for cloud advice which is sought after by both SME’s and top accounting firms in Australia.
Inbal Steinberg