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Steps to Transition to New Accounting Software: Best Conversion Practices When Moving Data


One of the biggest questions companies face when facing the steps to transition to a new accounting software, is the amount of data they should bring forward from the old system. The temptation is to move as much information and data as possible, but that approach has proven to have little merit while increasing risk of project failure and adding unexpected costs (all the things you are trying to avoid). Whether you’re moving to a modern cloud accounting and ERP solution, like Microsoft Dynamics 365 Business Central, or doing a major upgrade of your current system, it will prove imperative to keep these top data migration facts, tips, and best practices in mind to steer your project towards success.

1. Data table definitions will be very different from the old to the new systembut an analytics platform can help

The variance in underlying data structure is an under-the-hood factor that greatly increases both risk and cost of whatever data you choose to move into new accounting software. Whether you are talking about inventory purchase and sales history or historical customer and vendor transactions, moving legacy data will have a huge impact on the new system. A posted sales invoice, as an example, may touch up to fifteen to twenty unique tables, meaning that any reports or functions, such as inventory replenishment routines, may be working with incomplete or inconsistent data if you try to bring legacy data forward. In other words, there likely won’t be an easy, one-to-one or apples-to-apples path for the data that you move, which is why it’s important to think about the data you will actually need in there and why. There is no point in inflating, overcomplicating, or burdening your new system for no reason. One option to discuss with your trusted accounting software partner is the use of a data warehouse for transactional data, like that from Jet Analytics. This will allow you to limit your data migration and conversion to master records only (GL, Vendor Records, Customer Records, Item Cards, etc.) and leverage the data warehouse for historical transactional reporting. Investing in a governed data warehouse and analytics platform will also serve your business moving forward while reducing the overall cost of the new accounting software upgrade.

2. General ledger data can often be brought forward, if the information is consolidated to an appropriate level

There are number of factors that influence the success of this action. The first is the consistency of the chart of accounts between the two systems. New account numbers or changes in account numbers can be accommodated, with a conversion table, if there is a “one to one” relationship or “many to one” relationship between the old and new account numbers. “One to many” relationships can only be accommodated if the company is willing to spend a lot of time analyzing the transactions in the account to determine how they should be split up. Account segmentation and cost dimensions also affect the ability to create consistent reporting using old and new data in the new system. Sometimes, it just makes sense to start with a balance sheet as of the conversion date if there are just too many differences. At other times, net changes by account by month will work well. If the systems are completely compatible, a company may choose to bring in several years of detailed data. If you choose the detail route, make sure there is time to post the data before you need it. Either way, be sure you consult with your accounting and ERP software partner about your desires and their implementation methodology.

3. Imported data should be imported into posting journals, not directly into tables

Importing data directly into tables by-passes the business rules necessary for the system to work properly. Better systems have a variety of journals that data can be dropped in. Using the post function in these journals forces the data to pass the business rules in place. Directly importing data requires a perfect understanding of the data structure and manipulation of the data from the legacy system to it will match the new schema which poses a high risk, for both cost and the time delays that may result if the process doesn’t work out perfectly. In many cases, the problem with data will not become obvious until the system has been live for several days or weeks, which requires either a huge reset to re-do the “go live” or massive effort to analyze and fix the errant information.

4. Customer, vendor, and inventory item tables as often full of old data

A major advantage of moving to a new system is shedding inactive customer, vendor, and inventory item records that are no longer applicable. In some cases, only 20-30% of records should be brought forward. This is the change to clean things up and make the system easier to use after the conversion. In short, let it go!

5. Make sure to run at least two practice data conversions with testing in the new system

The test data conversions do not have to include all data from the old system but they must include representative examples of everything to be brought forward, and not just a few samples. Remember, it is the exceptions that break processes. There can’t be any hiccups in this process when the “go live” data conversion is carried out as there is often little time or recourse for re-doing it, if something doesn’t work. Data conversion routines, which often require data validation as transactions are imported and posted, can run for several days straight.

6. Pick a time of year when things are slower, not the year-end

It might seem obvious but picking a time of year to prepare for a system conversion, run the data conversion, and then work through reduced productivity while people learn the new system, is an important factor in reducing the stress on the organization and people. Make sure they have the time they need to work on the data preparation, testing, and training or hire more people to make that possible. Year-end is often the worst time to convert to a new system as the finance people, in particular, are going to very busy with quarter-end, year-end and auditors.

7. Be ruthless with data to be brought forward

Here’s an anecdote for you: one of our larger customers who was migrating to a new ERP and accounting system by converting to Microsoft Dynamics 365 Business Central was adamant about needing two years of purchasing history for their purchasers. But as it turned out, the purchasers never used the legacy data, adding a lot of unnecessary costs and time onto the project. Every request to bring legacy data forward, other than the basic items, should be accompanied by a real (not hypothetical) business use case.

8. Keep the old system running for a limited period of time

Depending on the circumstances, your company may be able to keep the old system running with a few user licenses in case anyone needs to query the system. After a few months to a year on the new system, it is unlikely that anyone will need to access the old one and you will have already found the instances where you need data from the old one and developed solutions for it. For instance, a report writer may be able to combine information from both systems, creating a cost-effective and useful solution (such as the data warehousing option we mentioned in #1).

Summary of Best Practice Tips and Steps to Transition to New Accounting Software

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