10 common accounting and bookkeeping software migration mistakes

Why your accounting and bookkeeping software matters

The allure of online accounting software is undeniable. These cloud-based platforms offer real-time access to financial data from any device with internet access, automated workflows to streamline tedious tasks, and the flexibility to scale alongside your business. Your current system, confined to a desktop or laptop computer, maybe a relic from a bygone era. Or you may be weary of juggling multiple small business accounting tools and crave a unified platform.

Whatever your reasons for migrating, it's crucial to approach this transition strategically. A poorly planned switch can result in a costly, time-consuming ordeal that leaves you yearning for the simplicity of your old spreadsheets. To help you navigate this critical process, let's explore ten common mistakes Australian businesses make when switching accounting software – and how to avoid them.

Mistake 1: Not thoroughly evaluating your current & future small business needs

Before you dip your toes into the vast sea of accounting software options, take a deep dive into your business. What are the pain points of your current system? Are you struggling with cash flow management, project accounting or expense reports, or are you losing sleep over sales tax calculations and tracking income? Identify your must-have accounting features versus the ones that would be nice but optional.

Think long-term. Where do you see your business in the next few years? If significant growth is on the horizon, you'll need accounting software to accommodate that expansion. Features like multi-currency support, cash flow manager, advanced analytics, and customisable financial reporting will become increasingly important. Also, consider the unique needs of your industry. An independent contractor prioritises client service features like invoice management capabilities, while an e-commerce business requires robust inventory management capabilities. On the other hand, a retailer would need robust inventory management and point-of-sale integration.

By understanding your specific needs, you can avoid investing in software that's either too basic or too complex for your operations.

Mistake 2: Neglecting data migration planning

Your accounting data is the lifeblood of your business. Losing even a fraction of it during migration could lead to major financial disruptions and the arduous task of recovering lost information. Before you take the leap to new accounting software, meticulously craft a data migration plan. Back up all existing financial reporting data, encompassing financial accounts, customer records, vendor details, business reports, and any other relevant information. Verify compatibility between your old and new systems, and if necessary, bring in a professional to orchestrate a seamless transfer.

Mistake 3: Underestimating the learning curve

Transitioning to new accounting software is akin to learning a new language. Even the most intuitive online accounting software will have its own unique interface and terminology. Underestimating the time and effort required to master the new system can result in costly errors, delays, and frustration for you and your team.

Set aside ample time for training and practice. Explore resources like tutorials, webinars, and customer support channels offered by the software provider. Consider hiring a consultant or enlisting the help of an accountant with expertise in the new system. Investing in comprehensive training upfront will pay dividends in the long run.

Mistake 4: Ignoring data cleanup before migration

Your new accounting software is only as good as the data it houses. Migrating outdated, inaccurate, or duplicate data is like rearranging the deck chairs on the Titanic – it won't solve the underlying problems and may even exacerbate them.

Before migrating, dedicate time to clean up your accounting data. Reconcile bank accounts, scrutinise and update customer records, and purge any duplicate or irrelevant information. A pristine dataset will facilitate a smoother transition and lay the groundwork for more accurate financial reporting and analysis in the future.

Mistake 5: Failing to set a realistic timeline

Software migration is not a weekend project. It demands time, resources, and meticulous planning. Underestimating the time required can lead to hasty decisions, missed deadlines, and a disruptive implementation process.

Create a detailed timeline encompassing all phases of the migration: initial research and evaluation, data cleanup, training, testing, and finally, the go-live date. Assign realistic durations for each step, and be flexible enough to adapt your timeline if unexpected challenges arise. Remember, it's better to be thorough than to rush and risk costly errors.

Mistake 6: Not involving key stakeholders

Your accounting software is for more than just the person inputting the data. It impacts your accountants, bookkeepers, and anyone else who relies on financial information to fulfil their roles. Neglecting to involve key stakeholders in the decision-making process can breed resistance, hinder progress, and create a bumpy transition.

Assemble a migration team comprising representatives from all relevant departments. Solicit their input regarding needs and concerns and ensure everyone is aligned with the choice of new software. A collaborative approach fosters a smoother implementation and increases buy-in from your team.

Mistake 7: Choosing the cheapest option over the best fit

While budget considerations are undeniably important, especially for small businesses, opting for the cheapest or even free accounting software may not be the wisest long-term strategy. Remember, you often get what you pay for. A "cheap" solution may lack essential features, offer limited customer support, or prove difficult to navigate.

Instead of fixating on price, prioritise features and functionality that align with your business requirements.

Weigh the following features:

• Platform:
  • Cloud-based vs. desktop: Cloud-based software offers accessibility from anywhere with an internet connection, automatic data backups, and often collaboration features. Desktop software may be preferred for offline work or for those with concerns about data security.
  • Mobile apps: Mobile apps allow you to manage finances, create invoices, and track expenses on the go, offering flexibility and convenience.
• Automation:
  • Bank feeds: Automated bank feeds import transactions directly from your bank accounts, saving time and reducing manual data entry errors.
  • Invoice and payment automation: Automated invoicing and payment reminders streamline billing processes and improve cash flow.
  • Expense tracking: Automatic expense categorisation and receipt scanning simplify expense management.
• Industry-specific features:
  • Inventory management: Essential for businesses selling physical products, providing features like stock tracking, purchase orders, and cost of goods sold calculations.
  • Project accounting: Helpful for businesses managing projects, allowing for tracking project budgets, timelines, and profitability.
  • Time tracking: Useful for service-based businesses, enabling tracking of billable hours and generating invoices based on time spent.
• Additional features:
  • Reporting and analytics: Comprehensive financial reports and customisable dashboards provide valuable insights into your business performance.
  • Multi-currency support: Important for businesses with international transactions, enabling invoicing and tracking of finances in multiple currencies.
  • Payroll integration: Integration with payroll software streamlines payroll processing and ensures accurate accounting records.
  • Tax preparation: Features for calculating and filing sales tax returns simplify tax compliance.

Investing in the right software might require a larger upfront investment, but it can save you countless hours, resources, and headaches down the line. Prioritising the "best fit" ensures your accounting software is a valuable asset to your business, not just an expensive add-on.

Consider exploring options like Thriday, which caters specifically to small businesses and sole traders, serving as a go-to platform for all their banking and accounting needs. On the other hand, options like QuickBooks online and NAB Bookkeeper are better suited for larger businesses or those with more complex accounting requirements, offering a broader range of advanced features and integrations.

Mistake 8: Overlooking security and compliance requirements

Safeguarding your financial data is non-negotiable. A security breach can tarnish your reputation, alienate customers, and expose you to legal liabilities. When evaluating accounting software, prioritise robust security features such as data encryption, granular access controls, and regular backups.

If your business handles sensitive customer information or operates within a regulated industry, ensure the software adheres to relevant regulations. Look for features like audit trails, two-factor authentication, and data masking to protect customer data. Investing in security is an investment in the longevity of your business.

Mistake 9: Not taking advantage of free trials

Most software for small business offer free trials, typically lasting between 14 and 30 days. This is your chance to test drive the software, explore its features, and assess its compatibility with your workflow. Don't let this opportunity slip through your fingers.

During the free trial period, evaluate the software's user interface, customer support team responsiveness, and the availability of training resources. Consider importing a small sample of your accounting data to see how the software handles it. By the end of the free trial, you should have a clear understanding of whether the software is the right fit for your business.

Mistake 10: Doing it alone (Not seeking professional help)

If you're a small business owner with limited accounting knowledge, migrating to new software can feel like navigating a labyrinth. Don't be afraid to seek professional guidance if you need it.

An experienced accountant or consultant can shepherd you through the process, help you choose the right software, and ensure a seamless data migration. They can also provide valuable training and ongoing support to maximise your utilisation of the new system. Investing in professional expertise can be wise, which saves money,time and unnecessary stress in the long run.

Key features to consider when looking for online accounting software

When evaluating accounting solutions, several key features deserve your attention:

• Financial reporting and analysis: Comprehensive financial reports, such as profit and loss statements and balance sheets, are crucial for understanding your business's financial health. Look for software for small businesses that offers customisable reports, advanced analytics, and the ability to drill down into specific details, empowering you to make data-driven decisions.
• Sales tax management: Accurate calculation and reporting of sales tax is essential for compliance. The accounting app should be able to handle different tax rates and jurisdictions, automate tax calculations, and generate sales tax and cash flow reports, making tax time less of a headache.
• Expense management: Efficient expense tracking is key to controlling costs and maximising profitability. Look for features like automatic receipt scanning, expense categorisation, and integration with credit card statements, making it easy to monitor spending and identify potential savings.
• Receipt management: Keeping track of invoices, receipts, and other financial documents can be daunting. Choose an accounting app with robust receipt management capabilities, allowing you to store, organise, and retrieve documents easily. This not only saves time but also ensures that you have a complete audit trail for ATO compliance purposes.

Thriday, known for its all-in-one banking features, can seamlessly integrate your banking and accounting functions, providing a holistic view of your business finances. With features like automated expense tracking, receipt capture, invoicing, and bank reconciliation, Thriday simplifies your accounting tasks, leaving you with more time to focus on growing your business.

Frequently asked questions

Is my financial data secure in the cloud?

Reputable accounting software providers prioritise data security with features like encryption, regular backups, and multi-factor authentication. Research the provider's security practices before choosing a solution.

Can I switch accounting software mid-financial year?

Yes, but it's best to plan the switch carefully. Choose a time with lower accounting activity, back up your data thoroughly, and consider seeking professional help to ensure a smooth transition. Check out our guide on how to do switch accounting platform for our recommendations.

Do I still need an accountant if I use online accounting software?

While accounting software automates many tasks, an accountant can provide valuable advice on financial strategy, tax planning, and compliance. Think of software as a tool that enhances, not replaces, professional expertise. At Thriday, we free you from paying accountants for time-consuming tasks, allowing them to focus on providing you with expert knowledge on complex financial matters, business strategy, and proactive tax planning.

Can I try accounting software before committing to a subscription?

Most providers like Thriday offer free trials, allowing you to test the features and see if the software fits your needs before making a purchase decision. Take advantage of these trials to explore different options.

Switch to Thriday today and let the team do the lifting for you!

Remember, the best accounting software is more than just a tool – it's the key to unlocking peace of mind for business owners tired of losing sleep over endless hours spent on manual bookkeeping, chasing invoices, or worrying about tax time.

After all, isn't it time to reclaim your nights and weekends? Let Thriday handle the numbers while you focus on what you do best – growing your business. Sign up for your free trial today and see how we can transform the way you manage your business finances.