The major change in small business accounting is the movement to the cloud.  The promises the cloud offers of convenience and stability have piqued your interest but you are currently trapped in a legacy accounting system that doesn’t offer easy access to a cloud option.

You like the idea of merely approving bills rather than personally signing a check, licking an envelope (do people still do this?), paying postage and mailing a check.  

Benefits to your staff of integrating time tracking and receipt management through a paperless process sound too good to be true.  You may even be playing defense by trying to keep your current accounting staff from quitting while you look for changes in your process to benefit their lives.

You know where you want to go, but how do you get there from where you are now?

Ultimately, the solution is to migrate your accounting system.  While it is not necessarily a difficult change, it is certainly time consuming and tedious. Here are six steps to migrate your legacy accounting system to a modern cloud accounting system. 

6 Steps to Migrate Your Legacy Accounting System 

1. Assess Your Needs

Change is hard.  Before migrating, you must have a clear vision of where you’re headed. That clarity must also be shared among the affected parties.  This includes not only management but also the employees dealing with the system on a daily basis.

Massive change like this for your bookkeepers or accountants can bring insecurities for their role.  If you are dealing with a team of accountants and bookkeepers, take time to listen to them and share the vision.  If you want these employees to be with you after the migration you want their buy-in before the move.

2. Assess Your Current Resources

Accounting doesn’t make any money for your company.  Most businesses spend as little as possible in their accounting software and staff to get the job done.  Chances are good your accounting staff is close to capacity in their current system.

Every business is a combination of systems.  You have an existing accounting system and your staff are producing certain results with that system.  If those results are missed deadlines for monthly close, or trouble getting reports on time, it is a good sign your staff are at capacity. 

Consider the current results and evaluate whether or not you have a team with the capacity to perform the migration. If not you’ll want to look outside your current staff for help.

3. Assess Your Current Technology

You may be using a system you have no control over, is impossible to use or even access. Some software companies pitch software to accountants that it is almost impossible for the client to switch because it is so difficult to manage (wink, wink).

Being held hostage by your accounting system may be what is keeping you from moving forward.  In this circumstance, you need to know how to access the information, while realizing this adds complexity to the migration.

However, there’s a chance that you’re in an easily upgraded software package like QuickBooks Desktop.  In that case, the process is easier and the chances of serious delay (or damage) reduced. 

The technology you are currently using will make a dramatic difference in the transition.

4. Plan Your Timing

Regardless of when you start it will most likely not be a quick transition.  Like a construction project or software development, allow more time for this than you think you’ll need.

Whether internal or external resources are involved, timing is a critical part of the migration.  In a perfect world, the new system would start January 1st with every invoice, bill, bank deposit and all other transactions occurring in a new calendar year to match the tax return.  Unfortunately, the end of the calendar year, closing the books for the year and the resulting tax deadlines usually take precedence over migrating an accounting system.

If you are hiring a CPA to help with the migration, there’s a good chance they prepare taxes which means they’re out of commission until after April.  That makes it difficult because now you need to run parallel accounting systems until you can close one down. And you need the balances (after the year has been closed) from the old system to start the new system.

If you start migrating midyear, all invoices, bills, deposits and credit card charges for the year need to be entered in the new accounting system.  Because of this, the later in the year you migrate the data, the more work it will entail.

5. Pick Your Software

Now you’re getting to the home stretch and it is time to select your software.  Chances are you have a good idea of what you want. While marketers love the “cloud” word, there is a significant difference in what they are selling.  Take time to review what you’re purchasing and the add on applications you need to improve your business.  Migrating accounting systems is painful and requires political capital to make the change. You want to get the best option the first time.

6. Get It Done

Once you’ve done all these steps it’s time to take the plunge.  Setup the project in steps and start the migration process. Communicate with your accounting staff the timeline and expectations.  Let your other staff know there will be changes that will impact their work lives. Remember and communicate the vision throughout the process.  

The shiny new software is fun to use but it is work to deliver.  Proper expectations at the beginning will alleviate some of the inevitable stress that comes along with data migration.  If done correctly, the business will experience a reduction in tedious work, paper and hopefully stress.

I’d like to know about your experience migrating accounting systems.  

What was the most challenging aspect? 

What worked well?