Xero is increasingly becoming the destination of choice for Small Business accounting data. Our new clients frequently ask us the best way to migrate their data from Sage or Quickbooks into Xero. This post looks to answer that question.
This is an update to a 2012 post that can be viewed here.
Do you really need to move across your data?
It used to be that we didn’t recommend moving too much historical data to Xero because the costs just weren’t worth it and:
- You’re unlikely to refer back to this information very often at all (perhaps a few times a year?)
- You’re old data will still be there on Sage or QuickBooks or a spreadsheet. Okay they’re no fun to use but as long as you have good backups that data is not going anywhere.
- As long as you set up everything right on the migration date the future accounts will still be right whether you bring the history with you or not.
These days though the relative inexpensive of migration tools tend to swing the balance in favour of historical conversions.
When you move your accounts from spreadsheet or Sage there is one question that needs to be considered upfront. How much data should you transfer into Xero. As we see it there are three options:
- Move over balances at a single point in time;
- Move over all transactions for the current financial year; and
- Move over all transactions ever.
The Single Point in Time Method
This is the most straightforward approach and just involves copying across your balance sheet from your old accounting system to the new one. You then need to copy across the unpaid purchase and sales invoices. An accountant with a good familiarity with Xero should be able to do this in less than one hour.
This approach is absolutely acceptable from a tax and accounting point of view. It does mean though that all your old transaction data will have to remain in your old accounting system and you won’t be able to run shiny Xero reports for historical periods.
The other problem you face here is that unless you pick a VAT quarter end month you may have to put a bit of thought into preparing a VAT return from two different sets of accounting data.
Current Year Method
This is generally our preferred option if you are going from spreadsheets to Xero. Having a full years data means that when your accountant comes to prepare your next year end accounts all the data needed is sitting there in the Xero account.
In accounting terms, to achieve the migration you need:
- Enter your balance sheet as at the last year end accounts date;
- Enter all sales invoice since the first day of the accounting period;
- Enter all purchase invoices since the day of the accounting period;
- Import all bank transactions since the first day of the accounting period and reconcile these transactions against their invoices; and
- You may also want to transfer customer and supplier contact details.
At Caprica Online we will normally do all this for our new clients, though we do reserve the right to charge a fee if there are so many transactions that it looks like it might take more than four hours.
All the Transactions Ever
The final option involves transferring all your accounting data since day one of the business. In the past we wouldn’t recommend this option because it just took too many man hours to recreate data and realistically speaking you are unlikely to look at it more than a few times a year.
However a number of Xero add-on partners are now able to move across the data for you from a Sage backup or Quickbooks backup. This takes away the cost of paying an expensive accountant or the crazy amount of hours involved in doing it yourself.
Conversion Xero Add-On Partners
At present there are three conversion providers, you can see profiles of them here – https://www.xero.com/uk/add-ons/category/conversions/
In the past we have directed clients to Movemybooks and happily recommend this service that costs £120 + VAT for 12 months of accounting data or £180 + VAT, all you need to give them is a Sage backup.
Movemybooks also have frequent promotions (presumably funded by Xero) which makes the conversion free. At the time of writing they are offering free conversions for two years worth of accounting data.
One warning though, if you have foreign currencies in your Sage or Quickbook data you will not be able to use MoveMyBooks. Though their FAQ page does say they are looking to fix that soon.