Accounting

How to Make the Move from Excel to Accounting Software

By Caron Beesley

In our previous blog post, we discussed the pitfalls of using Excel as an accounting tool for your small business. Excel is great for simple accounting tasks, but as your business grows its limitations emerge. For example, Excel can be error-prone and requires some degree of programming expertise to get the financial reporting you need. It also exists in a little silo of its own – sharing it with your accountant or even just tracking data across several spreadsheets is a cumbersome exercise.

If you’re tired of manual accounting, invoicing, and general finance management, or your business is growing so fast that you can’t keep track of it all anymore, then it may be time to make the switch.

But how do you make the transition from a spreadsheet to online accounting software? Here are four tips to get you on your way.

Select Your Software
Choosing the right accounting software is a big decision. You don’t want to spend time migrating data to one tool only to find out it’s not the right one for you. Consider the following:

  • Seek the input of your accountant and/or tax preparer. If they prefer or are more familiar with one tool over another, then it may make sense to go that route. They’ll also be able to point you towards the right tool and subscription plan based on your functional needs.
  • Ask around. What software do other business owners in your industry prefer?
  • Check out industry reviews. Our earlier blog post Switching to Online Accounting Software – Why and How offers some tips for doing this.
  • Take a trial. Most software vendors offer a free 30-day trial. This will give you a chance to assess and familiarize yourself with one or two options before you make the switch.

Decide When you Are Going to Make the Switch
The best time to make the switch is at the end of your fiscal year. This will ensure that any new data – invoices, payments, expenses, hours worked, etc. – starts with a clean sheet.

With this in mind, it’s a good idea to time your 30-day trial accordingly. Allowing enough time to acclimate yourself with any system, before making the wholesale switch.

Prepare Your Data
Once you’ve signed up for a service, you’ll need to clean-up and prepare your data so that your reports integrate seamlessly into the accounting software. For example, you may need to rearrange your fields so that columns and rows are in the desired order. Some naming conventions may be different too, such as column headers. Your software should guide you through this process.

Most programs will let you import your Excel files and will offer tips on getting that data ready and in the right format.

Other data to organize includes customer information such as billing contact names and addresses for invoice generation (the software will include templates to create the actual invoices). This data can all be imported in .csv format or even from your email contact list. You might also need to import pricing and tax rates.

As you can see, there’s no need for fancy programming or third-party software. Any data that doesn’t get pulled over will require manual entry, but for the most part, the integration should be fairly straightforward if you allow yourself enough time and follow the software vendor’s guidelines.

Embrace New Features One Step at a Time
As you prepare to move from Excel to online accounting software, research and preparation is key. That being said, be prepared for a few bumps in the road. Take your time and ease yourself into it. Wrap your arms around one or two features at a time. You could start by organizing your expenses and issuing invoices. Then check out payment tracking tools and late payment reminders before diving into P&L statements, cash flow forecasting, and other rich reporting capabilities!

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