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Over the years I?ve often been asked ?When is the best time to migrate to a new accounting system??? Unfortunately, like so many questions in the accounting system?s arena, there is no one ?right? answer.? For more information on comparing accounting software systems and free implementation tools, go to http://www.accountingsoftwaresuccess.com.?
Year-end
The answer to the question ?When is the best time to migrate to a new accounting system?? depends on a number of factors.? Clearly one attractive alternative is the organization?s fiscal year-end.? By switching then, a full and complete fiscal year?s history is in the legacy system, and you can roll forward beginning balances into the new system.? Adjustments to the history (for instance audit adjustments) can be entered both into the old system and new system in order to keep the transition balances in synch.? At the end of the first year on the new system, a full and complete fiscal year is in that system in order to run reports and perform the audit.? That all is fine and good; however, the drawback is that we are now assuming we are going to implement the new system at one of the busiest times in our accounting cycle ? year-end.? Typically at year-end we have depreciation calculations and other adjusting entries, audit preparation, year-end statements to produce, etc.? If you are on a calendar year you also have a multitude of payroll issues to deal with.? It may not be the best time to try to learn a new system and to train staff.? The addition of that task to an already heavy workload may result in a poor result ? most likely with the implementation of the new system.?
Mid-Year
So the alternative is to pick a time when the workload provides for a focus on the implementation of and the transition to the new system.? This could really be any time of year, based on your organization?s business cycle.? However, if possible moving this task toward the beginning of the year, or the end of the year, is typically best.? If you implement toward the beginning of the year, you might consider using the first couple of months of transactions (already processed in the legacy system) as training data in the new system.? This will build that history and, voila!, you have complete data.? Likewise, if you implement toward year-end, you could use the last couple months transactions as training data in the new system, and then delete those transactions before putting in new year beginning balances.? Again, you could still benefit from the vendors you?ve established, etc.? During this transition time you are also documenting procedures, refining controls, etc.? See our other articles at www.accountingsoftwaresuccess.com for further information on a well-planned implementation.
Conversion
Finally, if you are able to convert data from the legacy system to the new system this may also provide you additional flexibility in when you make the switch.? But beware ? changes in account structure and codification of accounts, vendors, customers, employees, etc. will often complicate these efforts.? On more than one occasion I had to explain to a client that manually entering data was more cost effective than completing an electronic transfer.? And of course it?s not just the initial effort, but also time spent finding and fixing any errors that may be introduced during the transfer.?
Finding the right time for your organization to make the switch can reduce the stress and challenges that the change will undoubtedly create.? Making a smart decision will give you better results, both initially and long-term.
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