Upgrading to high-quality accounting solutions can make a world of difference for any small business. For a firm that has relied on basic spreadsheets for its finances previously, deploying new accounting software can be like making the switch from a flip phone to a smartphone.
When you get a new phone, one of the first things you need to do is move over all of your contacts and other data from the old device. The same is essentially true of advanced accounting software, with one big difference: The process of moving, converting and integrating historical data can be a lot more complicated. And it's absolutely critical for any firm hoping to gain the greatest possible advantage from its software assets.
That's why it's so important to make data conversion and integration a priority when making the upgrade to a new, improved accounting software solution.
For any accounting solution to perform at an optimal level, it needs to have as much data available as possible, and that information needs to be completely accurate.
This is a more serious accounting challenge than it may seem at first. It's not just a matter of importing stats from one program to another. After all, the legacy data will presumably exist in a very different state than what is required by the accounting solution.
"Data conversion needs will vary from one company to another."
What's more, data conversion and integration needs will vary significantly from one company to another, depending on the level of detail needed, the amount and type of historical data and other factors.
Planning and conversion are therefore essential.
One of the key questions, then, is how to go about converting and integrating legacy data.
There are essentially two leading options here. In some cases, it may make more sense to focus on the most important basic data. This includes net general ledger trial balances and ongoing accounts payable and receivable, all going back two years or so. That should provide enough historical information for the new accounting software to deliver useful insight and comparisons.
Another option is a more detailed transaction conversion. In this case, the transition can include everything from sub-ledger transactions to individual general ledger journal entries, deferred revenue, project transactions and more.
Determining which path to pursue, and then actually executing that plan, is a difficult task - one which most businesses would be better off outsourcing. Partnering with a third-party accounting partner that offers data conversion and integration services will provide the best outcomes, along with peace of mind for small-business leaders.