Changing bookkeeping software- is it worth the hassle?
20 February 2020
The thought of changing accounting software can be a real headache and cause lots of people stress. After all, why change when you already
have a system and habit of keeping your accounting records anyway. Changing software will mean that you need to learn a whole new system which will need extra time and will also mean learning how to solve new problems, all of which is just extra stress to your already very stressful day.
We like to think a change of software as an investment to making life easier. There are many reasons why you want to change and your reasons for changing would really depend on how things are working for you at the moment. We can see that HMRC are encouraging us to make the change introducing things like MTD (Making Tax Digital). At the moment MTD has only been introduced for VAT but eventually it will be introduced for income tax and corporation tax. We have found that with the successful implementation of new software, although it may be a hassle to start with, certainly pays off in the future. If used correctly you should save time as we all know time is money and precious.
When is a good time to change software?
In an ideal world you would change software at the start of a new accounting year, however, waiting up to 12 months to change software can be quite a long time to make a change and is not always necessary. The main points we look at when changing is your VAT return dates (if you are VAT registered) as it is important that your new software picks up from where your old software has left off. Changing mid financial year is not a problem.
You also need to ask yourself what information do you want to obtain from your software, for some people using a software just for compliance purposes is all they need whilst for others they would like to make comparisons of how the business has grown or performing year on year. Obviously if you fall in the latter category then you will need to import more data onto a software so it has a history of your previous trading information. There are ways to import this information pain free.
There is also specialist conversion software that you can use to help import data from an old system to a new system. Please speak to us about this. This would depend on what software you are going from and also the software you are going to.
What issues am I likely to have whilst making the change?
This would really depend on what software you are changing from and what software you are changing to and how familiar you are with the new software. The main point that we would like to make you aware of is that if you switch to us then we are here to help you through each step of the way.
What are the main hurdles in changing software?
You will need to enter the opening balances on your system. This is basically your opening trial balance which should mirror your closing trial balance from your old system on the date you decide to convert. It is not always possible to get this 100% right but there are a few key balances that you need to get correct. Quite often we will start off with the key balances being correct and then once the company accounts are done go back and post opening balance adjustments.
The new software doesn’t do what the old software used to do
Sometimes you will find that what you used to be able to do on your old software you cannot do on your new software. We generally find that there is a work around or a better way of doing something on the new software as generally processes and reports get better than get worse. If you have moved away from a software that is specific to your business you may find that you have lost some functionality but you will probably find that there will be third party add on apps that will help you obtain the result that you need. It is difficult to list out all the possible outcomes but before making the switch we will help you to make sure that the new software will do everything you need it to do.
The new system takes longer
As with most things in life learning a new software will mean that you will be slower in using that software until you have experience and learn about the capabilities of the software. We generally find that it will take longer to start off with, however, you will quickly find shortcuts and reports to speed things up. You will also be able to delegate tasks to junior members of staff by giving them restrictive access to your accounting system and thereby free your time up.
So what software do we think you should use?
We at Simon & Co are Xero Gold Partners and are very familiar with Xero. In most cases we would probably recommend Xero as this suits a wide range of businesses from small to large. Xero works with many third party software as well as having its own brilliant features such as timesheet recording, project management and now Hubdoc (receipt management).
We also use FreeAgent and find that FreeAgent is a brilliant software for contractors. We do have non-contractor clients using FreeAgent who are also happy with the system. A brilliant plus point for FreeAgent is it is free if you bank with NatWest. bank. FreeAgent also provides free telephone support which is very rare these days.
Please talk to us about your needs and we can help you with making the right decision and making the change.