With the dawn of a new year, we often take inventory of the past year to evaluate what’s working well and what isn’t. Have you considered whether your current accounting software is still meeting the needs of your business? Is it time, or even past time, for a conversion to QuickBooks?
Maybe your accounting software worked well enough when your business was getting off the ground, but you’ve outgrown it now. Perhaps it never had the capacity to track all of the things you hoped it would. Or did you assume that you could use the free version of a particular software, but are now realizing that the features you really need are going to cost you dearly?
Why choose QuickBooks?
We’ve found QuickBooks to be the best accounting software for several reasons. For starters, it’s the most well-known accounting software system in the US, geared for small to mid-size businesses. You don’t need an accounting degree to navigate the software on a day-to-day basis (though it is recommended you have an expert help you to set it up and review the financial statements regularly). QuickBooks is committed to continually improvement of their software. In fact, according to their fiscal 2022 financial report, the company spent $2.347 billion dollars on research and development, a nearly 40% increase from 2021!
Don’t hold off on converting to a new system just because the task feels daunting. If you’re ready to take the leap to convert from your old accounting system to QuickBooks, we’ll help you break down the process of conversion. Proper planning and adequate resources can make for a successful conversion.
Before you completely ditch your old system for QuickBooks, you’ll need to spend some final quality moments with your old system.
Choose a starting date
First of all, decide when is the right time to start tracking in QuickBooks. It’s most convenient to make a clean break with your old system at the end of a month, quarter, or year. You don’t need to do the actual conversion on the start date, but a clear cutoff date between the two systems is helpful for historical purposes.
Get bookkeeping up to date
Reconcile your bank accounts and address any uncleared items. Categorize your credit card transactions. Correct inventory counts, get rid of duplicate bills, and deal with old receivables that may need to be written off.
Pull reports from your old system such as the balance sheet, profit and loss (P&L) statement and a trial balance, as well as an A/R and A/P Aging Summary. If you’re starting in a new year, your prior year’s tax return will provide helpful information, as well. This information will provide the “opening balances” for your balance sheet accounts.
Organize your Chart of Accounts
Find an order or system that is useful for making business decisions by utilizing sub-accounts when relevant.
For example, for better reporting on your profit & loss (P&L) statement, make separate revenue accounts that reflect the various parts of your business. Set up your variable direct costs as Costs of Good Sold accounts, since this will give you a gross profit amount. Split your remaining expense accounts into “fixed” and “variable.” This will give you better information as to where you can trim expenses and/or reduce overhead amounts when reviewing your P&L.
Cull your lists
Check your customer list, vendor list, employee list, and any other lists you use. Delete duplicates or unused accounts, and deactivate old accounts.
Decide how much data to move
Decide whether you’re going to move all historical data from your old system, or if you’re going to start fresh in QuickBooks and retain your old data in your previous system for reference.
We prefer to bring as much data as we can for comparison reports. If a data migration is not possible, then we recommend entering either monthly, quarterly, or, at a bare minimum, annual journal entries for at least two years prior, in order to have comparison data.
Take a QuickBooks class
Be sure that at least one person in your office has the time and resources they need to get acquainted with QuickBooks, preferably before the new system is fully implemented. While we find QuickBooks to be fairly intuitive, there are always certain idiosyncrasies within any software system.
Since 2009, we have been offering classes for both QuickBooks Desktop and QuickBooks Online. We currently hold virtual training classes, but also offer one-on-one training sessions for more specific questions and issues.
Hire professional help
We have helped dozens of clients switch to QuickBooks from accounting software such as Peachtree/Sage 50cloud, Quicken, Xero and Wave. We have even helped clients transition from Excel to QuickBooks when their good old-fashioned spreadsheets just weren’t cutting it anymore!
The conversion itself doesn’t take long. What is most time consuming is the “cleanup” process. Depending on the complexity, we can usually take care of this for you within a few weeks.
Use QuickBooks frequently
Check in with your new system daily, or at the very least, weekly. It’s very challenging to learn something new if you only look at it once a month!
Check out our YouTube channel for tutorials on various topics that we’ve seen clients struggle with in both QuickBooks Online and Desktop versions.
Be patient with yourself
It takes time to optimize any system. If you’re coming from another program, start with the mindset of, “This is a new and completely different program that I need to setup/learn/optimize to fit my needs.” Remember: Small progress is still progress!
Ask for support
As certified QuickBooks ProAdvisors, we can review your setup and make recommendations that are unique to your business in order to optimize your QuickBooks experience. The more dependable your financial information is, the better decisions you can make for your business.
Twelve months from now, you will likely reflect back on what worked and what didn’t work for your business in 2023. Let this be the year that you feel confident in what your accounting software can do for you and in how well you can navigate it.
We want you to be successful in all your business endeavors. Let us know how we can help!