There comes a point when you decide that a cloud-based accounting system is the right choice for your business. Once you make that decision, the next step is to determine how to implement a cloud-based accounting system.
The process to implement a cloud-based system is straightforward, however, the main challenge will be to convert your existing financial records into your new, cloud-based system. Below I have outlined the main steps involved to successfully convert your records:
1. Choose a conversion date
The first thing you will want to do is choose the date from when all transactions will start being processed with your new, cloud-based system. For example, if you want to start using your new system as of January 1, then January 1 would be the conversion date.
2. Obtain Trial Balance, Chart of Accounts, Invoices and Bills, Contacts, etc. from previous system
The next step is to obtain your trial balance from the day immediately preceding your conversion date. For example, if your conversion date is January 1, then you will need to obtain your trial balance as of December 31. Then, you will want to retrieve your chart of accounts (if you want to import it) and your invoices and bills from your previous system. Fixed assets, inventory data, contact information etc. will also be data that you will want to transfer over.
3. Import Data from previous system
Now that you have your trial balance and other important data on hand, you can start importing/transferring over your data. The primary data to transfer over includes:
- Chart of Accounts – Although your cloud-based system will have it’s own chart of accounts if you choose to use it, you may want to use the account coding/naming from your previous system. If so, it is suggested that you import your previous chart of accounts.
- Trial Balance – As the trial balance will contain the opening balances immediately preceding the conversion date, you must import these values into your cloud-based system.
- Invoices and Bills – For your accounts receivable and accounts payable balances, you will want to import the supporting customer invoices and vendor bills. The reason this data is required is to track who owes you money and who you owe money to. When future payments are received/paid out, they can easily be applied to these invoices/bills appropriately.
- Import other data – Fixed assets, inventory and other account details may be necessary to transfer over. Also, it is recommended you import your contact information as to save time from manually inputting each customer/vendor.
4. Setup bank and credit card feeds
Now that your new system has the important data from your old system, the last main step is to connect your live bank and credit card feeds. I recommend the feeds begin as of the conversion date.
By knowing what information from your old system is required and the steps involved in transferring the data into your new system, the conversion process is not as intimidating as it sounds. The end result will be a cloud-based accounting system that will enable you and your company to realize many valuable benefits.
If you require assistance with setting up your new system or transferring over your data, feel free to reach out to me with any questions.