Outgrowing Accounting Software: How to Plan the Move

Outgrowing accounting software rarely happens on a single day. It shows up as more spreadsheets, longer month-ends and more manual checks, until someone asks whether the business needs a bigger system. This guide is about what comes next: how to plan the move so it fixes the problems you have, rather than moving them somewhere new.

If you are still deciding whether you have outgrown your package at all, start with our guide to the signs you have outgrown your accounting software.

Decide what the new system must do

Begin with the work, not the software. Write down the reports the board reads, the approvals you need, the stock or project information you track elsewhere, and every place data is keyed in twice. That list becomes the test any new system has to pass.

Be honest about which problems are process and which are system limits. Some issues disappear with better use of the package you already have, and our article on an ERP compared with a stack of separate tools helps you weigh that up.

Key PointKey point: A requirements list written from your own month-end is the most useful document in the whole project. Suppliers should be measured against it, not against their own demonstrations.

Plan what history to bring across

You do not have to move every transaction you have ever posted. Most businesses bring across opening balances and open items, and keep the old system or an archive for history.

Whatever you decide, the records still have to be kept. GOV.UK says a limited company must keep records for 6 years from the end of the last company financial year they relate to, so plan how you will reach the old data for that long.

Watch OutWatch out: Do not switch off the old system until you know how you will answer an HMRC question about a transaction from three years ago.

Clean the data before you move it

Moving messy data into a new system gives you a new system full of messy data. Before the move, remove duplicate customers and suppliers, close old accounts you no longer use, and agree a clean chart of accounts.

New systems usually import data from spreadsheets. As one example, Microsoft's guide to importing data into Business Central describes templates for accounts, customers, vendors and items, a default configuration package for master data, and a migration extension for QuickBooks.

Pro TipPro tip: Run a trial import into a test company first, then reconcile the trial balance and the customer and supplier balances to the old system before you set a go-live date.

Choose a sensible go-live date

Pick a date that keeps reporting simple, such as the start of a month, a quarter or a financial year. Avoid going live in the middle of a VAT quarter unless you have a plan for the return that spans both systems.

All VAT-registered businesses should now be signed up for Making Tax Digital for VAT, so confirm with whoever files your returns that the new system can submit them before you switch.

Get an independent view first

A move is easier to plan when someone has looked at how you work today. Our free ERP Health Check asks where your system is letting you down and sends back a short report on where to focus first, with no obligation.

If you already run an ERP and wonder whether it is the real problem, read the signs you have outgrown your ERP. For independent guidance on finance systems, the ICAEW technology resources are a useful reference.