At Starfish, we’re all about Xero. There are a lot of different accounting software packages out there, but none are as laser-focused on small businesses as Xero. If you’re in the early stages of considering converting to Xero, we have lots of helpful information and opinions on why we recommend it.
If you’re SOLD and you’re ready to integrate it into your business, there is a smart way to go about it: convert to Xero at the beginning of your financial year.
Whether you’ve been trading using another software, spreadsheets or even paper records, you will have existing data that needs to be transferred over to your new software (Xero). Everything will need to be matched up and accurate in Xero for it to be a successful and helpful migration.
Doing this part way through a financial year is possible, but will be more painful. If you think about the start of the financial year as a blank slate, it’ll be easier to ‘close down’ your old system and start fresh. There’s a higher chance of accuracy and a lower chance of pull-your-hair-out disruption. You might end up doing things like overpaying or reclaiming VAT twice if not done properly – and nobody wants that!
With a new financial year as your starting point, plan your move and follow a logical set of steps
We always recommend our clients plan ahead and give themselves time for a Xero migration. With your new starting point, you’ll need to move over all the things you had at the beginning of the financial year.
Here are the steps we recommend our clients follow:
- Put your opening bank balances into Xero. Otherwise Xero will start importing bank transactions through the bank feed, but it won’t have your starting balance. If that happens, your balance will always be missing your starting balance amount. For example, If you had £2500 in the bank, you’ll always be off by £2500.
- Add into Xero any money you’re owed. If you have customers that owe you money, you’ll want to add in those sales and invoices so you can figure out who’s paid (and who hasn’t) and match it all up in your new system.
- The same goes if you owe suppliers. You’ll need to input your list of outstanding purchase bills, so you don’t double up on things and pay twice.
- Add any fixed assets to the Xero fixed asset register. If you have any fixed assets at the start of the financial year (eg. a van or office furniture) you’ll want to add these into Xero. You’ll need to know what the brought forward depreciation figure is (which can feel a wee bit techy, so do ask us if you need help there).
- Move over any integrations. If you’re using other software (eg. a POS software or sales pipeline app) get those integrated into Xero. Or alternatively, look at integrations you want to have in place. Need your website to connect to Xero? Now’s the time to link it all up.
We always ask our clients: how far back in time do you want us to go?
Another important consideration when you’re converting to Xero is how much of your historical data you want to bring over.
You will want a certain degree of historical data, because it gives you something to benchmark and compare future data to. For one client, we might go back and input a full year’s worth of transactional data. For another, we might look at inputting totals per month, so that you can get laser focused on comparing month to month profit. I.e you can run a report that looks at profit in April ‘23 vs profit in April ‘22.
You really don’t have to manage this by yourself
This might all feel really technical and a lot of pressure to get right. We have a couple of ways of helping you migrate easily and accurately for this reason.
- We can do the Xero conversion for you. We’ll look at what’s needed for you and work through the process of moving you over. The more straightforward the conversion, the less we charge, starting from around £300 + VAT. If you have hundreds of contacts, invoices and assets to add, and thousands of transactions, then the cost would be significantly more.
- We can provide Xero consulting. This is perfect for someone who has got part way through the process and is finding a particular step more difficult or confusing. We’ll guide you through that tricky step. You don’t have to pay for more than you need and can book time in 15 minute increments, so this could cost you as little as £50 + VAT.
Whichever you feel fits you best, contact us. We’ll look at what you’re working with already and what requirements you have.
If there are 3 takeaways to leave this blog with, it’s this:
- If you don’t move your existing financial data over, having a Xero account is a waste of time.
- The start of your financial year is the best time to move your financial data over if you want to reduce stress and hassle.
- You do not have to work on this alone. We’re set up to help make it 10 x easier for you.