How to Switch Accounting Software Without Losing Data (NZ Guide)

• 13 min read

Switching accounting software can feel overwhelming. Fear of losing data, disrupting business operations, or making costly errors keeps many NZ businesses stuck with inadequate systems. This comprehensive guide walks you through the entire migration process, from planning to go-live, ensuring a smooth transition without data loss.

Migration Success Rate

With proper planning, 95% of accounting software migrations complete successfully within 4-8 weeks. This guide gives you the roadmap used by NZ accountants and bookkeepers to migrate hundreds of businesses annually.

When to Switch Accounting Software

Not every frustration warrants switching software. Migration takes time and costs money. Switch when:

Good Reasons to Switch

  • Outgrown Current System: Adding employees, locations, or complexity your software can't handle
  • Accountant Requirement: Your accountant requires specific software (Xero or MYOB) for collaboration
  • Cloud Migration: Moving from desktop to cloud for remote access, mobile, and modern features
  • Missing Critical Features: Need inventory management, multi-currency, job costing not available in current system
  • End of Support: Vendor discontinuing product or ending support
  • Cost Savings: Current system significantly overpriced for your needs
  • Compliance Issues: Software doesn't meet NZ tax/GST requirements properly

Bad Reasons to Switch

  • Minor Frustrations: Small annoyances that training could fix
  • Grass is Greener: Switching just because competitor has different software
  • One Missing Feature: When 95% of your needs are met, add-on might be better than switching
  • Impulse Decision: Switching without evaluating if new system truly better
  • Price Alone: Choosing cheaper option without considering features, support, migration cost

Rule of Thumb: If migration will cost you $2,000-$5,000 (software + time + professional help), make sure you'll recoup that within 12-18 months through time savings, reduced accountant fees, or better business insights.

Phase 1: Planning & Preparation (Weeks 1-2)

Proper planning prevents data loss and minimizes disruption. Spend 2 weeks on planning before touching any data:

Step 1: Choose Your New Software

  1. 1.1 Identify requirements (features needed, must-haves vs nice-to-haves)
  2. 1.2 Consult your accountant (what do they prefer/require?)
  3. 1.3 Shortlist 2-3 options (read our NZ accounting software guide)
  4. 1.4 Trial each option (14-30 day free trials available)
  5. 1.5 Make final decision and purchase subscription

Step 2: Choose Migration Timing

Best Time to Migrate:

  • Ideal: Start of financial year (April 1 for most NZ businesses)
  • Good: Start of quarter (July 1, October 1, January 1)
  • Acceptable: Start of month (GST period if two-monthly filer)

Worst Time to Migrate:

  • • Mid-financial year (splits year across two systems)
  • • During peak business season (Christmas retail, tax season for accountants)
  • • Right before major deadlines (GST return due, annual return)

Step 3: Decide What Data to Migrate

Recommended Approach (90% of businesses):

  • Migrate: Opening balances as of start date (one journal entry)
  • Migrate: Customer and supplier lists (names, contact details, terms)
  • Migrate: Chart of accounts structure
  • Don't Migrate: Historical transactions (keep old system as read-only archive)
  • Don't Migrate: Old quotes, invoices (unless absolutely necessary)

Why Minimal Migration is Better:

Importing years of historical data takes weeks, introduces errors, and you rarely need it. Starting fresh with accurate opening balances is faster, cleaner, and less risky. Keep old system accessible for 12 months for historical reference.

Step 4: Assign Roles & Responsibilities

  • Project Lead: Business owner, office manager, or bookkeeper (owns timeline, decisions)
  • Data Cleanup: Bookkeeper (reconcile accounts, fix discrepancies in old system)
  • Technical Setup: IT person or software vendor (configure integrations, users, permissions)
  • Professional Advisor: Accountant or migration consultant (validate setup, opening balances, chart of accounts)
  • Training: Project lead (train staff on new system)

Step 5: Create Migration Timeline

Document key dates:

  • • Cutoff Date: Last transaction in old system (e.g., March 31)
  • • Go-Live Date: First transaction in new system (e.g., April 1)
  • • Parallel Period: Run both systems simultaneously for 1-2 weeks (optional but recommended)
  • • Old System Lockdown: Make old system read-only (backup and archive)
  • • First GST Return: When is first GST return due in new system?

Phase 2: Data Cleanup (Week 3)

Clean data in your OLD system before migration. This is the most overlooked step, but critical for successful migration:

1. Reconcile All Bank Accounts

Ensure every bank account is reconciled through your cutoff date. Unreconciled transactions = inaccurate opening balances. If 6 months behind on reconciliation, do it now or pay bookkeeper to catch up.

2. Clear Suspense/Uncoded Accounts

Review suspense accounts, uncategorized expenses, and unallocated income. Code everything correctly. Don't migrate garbage data.

3. Review Aged Debtors & Creditors

Clean up customer and supplier balances. Write off bad debts (with accountant advice). Correct invoice/bill allocation errors. Your opening balances for debtors/creditors must be accurate.

4. Fix GST Issues

Ensure GST return for last period in old system is 100% accurate and filed with IRD. Reconcile GST liability account to IRD records. Any discrepancies must be fixed before migration.

5. Clean Up Customer/Supplier Lists

Delete duplicates, inactive contacts (haven't traded in 2+ years), test entries. Update contact details, payment terms, tax rates. Only migrate active, clean contacts.

6. Review Chart of Accounts

Simplify your chart of accounts. Delete unused accounts. Consolidate similar accounts. Your accountant can help design a cleaner structure for new system.

7. Run Trial Balance

Generate trial balance as of cutoff date. This is your source of opening balances for new system. Save as PDF (dated snapshot). Accountant should review this before migration.

Critical: Do NOT skip data cleanup. 80% of migration problems stem from migrating dirty data. Spend the time cleaning old system properly, or pay a bookkeeper $500-$1,500 to do it.

Phase 3: Data Migration (Weeks 4-5)

Now you're ready to set up the new system and import opening balances:

Week 4: New System Setup

  1. 4.1 Create organization in new software (company name, IRD number, GST registration, financial year dates)
  2. 4.2 Set up chart of accounts (use default NZ template or import custom structure)
  3. 4.3 Configure GST settings (monthly/two-monthly, cash/accrual basis, rates)
  4. 4.4 Set up bank accounts in software (don't connect bank feeds yet)
  5. 4.5 Configure invoice/bill templates (logo, payment terms, bank details, layout)
  6. 4.6 Import customers and suppliers (via CSV or manually enter top 20)
  7. 4.7 Set up user access (invite users, set permissions)
  8. 4.8 Configure integrations (payroll, payment processors, apps)

Week 5: Import Opening Balances

Opening balances are the most critical part of migration. Get these wrong and all your financial reports will be incorrect.

  1. 5.1 Create journal entry dated as of cutoff date (e.g., March 31)
  2. 5.2 Enter opening balance for each account from trial balance:
    • • Bank accounts (match bank statement balances)
    • • Accounts receivable (aged debtors total)
    • • Accounts payable (aged creditors total)
    • • Fixed assets (net book value)
    • • Loans (outstanding balance)
    • • Equity accounts (retained earnings, capital)
    • • GST liability (owed to/from IRD)
  3. 5.3 Journal must balance (debits = credits). If it doesn't, find the error.
  4. 5.4 Import outstanding invoices & bills (optional, for businesses with many open invoices):
    • • Import unpaid customer invoices (to track who owes you)
    • • Import unpaid supplier bills (to track what you owe)
    • • Verify totals match opening accounts receivable/payable

Opening Balance Shortcuts:

Most accounting software has "Add Opening Balances" wizards that simplify this process. Xero, MYOB, and QuickBooks all offer guided opening balance entry. Use these tools rather than manual journal entries if available.

Get Professional Help with Opening Balances

This is where most DIY migrations fail. Consider paying your accountant or bookkeeper $300-$800 to:

  • • Review your trial balance for errors
  • • Set up chart of accounts properly
  • • Enter opening balances correctly
  • • Verify balance sheet matches old system

This investment prevents months of reconciliation problems and incorrect financial reports.

Phase 4: Testing & Validation (Week 6)

Before going live, thoroughly test the new system to catch errors:

Test 1: Balance Sheet Reconciliation

Generate balance sheet as of cutoff date in NEW system. Compare to trial balance from OLD system. Every account should match exactly. If any discrepancies, find and fix before proceeding.

Test 2: Bank Reconciliation

Bank account opening balances should match bank statement balances as of cutoff date. Connect bank feeds (if using cloud software) and ensure transactions import correctly.

Test 3: Aged Debtors/Creditors

If you imported outstanding invoices/bills, run aged debtors and aged creditors reports. Totals should match opening accounts receivable/payable. Check aging buckets are correct.

Test 4: GST Settings

Create test invoice and bill. Verify GST calculates correctly (15% in NZ). Check GST tax code defaults are correct for income/expense accounts.

Test 5: Workflow Testing

Run through common tasks: create invoice, record payment, enter bill, reconcile transaction, run P&L report. Make sure everything works as expected.

Test 6: Integration Testing

Test all integrations (payroll, POS, payment processors). Ensure data flows correctly between systems. Verify payroll journals post to accounting correctly.

Test 7: User Access & Permissions

Have each user log in and test their permissions. Ensure staff can do their jobs but can't access restricted areas (e.g., payroll staff can't see financial reports).

Validation Checkpoint: Don't proceed to go-live until ALL tests pass. One error in opening balances will haunt you for months. Take the time to get it right.

Phase 5: Go-Live (Weeks 7-8)

You're ready to start using the new system for daily operations:

Week 7: Soft Launch (Parallel Running)

  1. 7.1 Start recording transactions in NEW system (from go-live date forward)
  2. 7.2 Continue recording transactions in OLD system (for comparison)
  3. 7.3 Run both systems in parallel for 1-2 weeks
  4. 7.4 Compare reports daily (bank balances, P&L, debtors/creditors)
  5. 7.5 Fix discrepancies immediately (usually data entry errors in new system)
  6. 7.6 Train staff on new system during this period

Parallel running is optional but highly recommended. It gives you confidence that new system works correctly before abandoning old system. Especially important for businesses with complex accounting.

Week 8: Full Cutover

  1. 8.1 Stop using old system (make read-only, final backup)
  2. 8.2 Announce to staff: new system is now primary system
  3. 8.3 Grant accountant/bookkeeper access to new system
  4. 8.4 Process first full month in new system
  5. 8.5 Complete first bank reconciliation in new system
  6. 8.6 File first GST return from new system (if due)

DO: Keep Old System Accessible for 12 Months

Don't delete old system immediately. You'll need to reference historical data occasionally (old invoices, past tax returns, prior year comparisons). Keep login credentials active for at least one full financial year.

DO: Backup Old System Data Permanently

Create final backup of old system data. Export to PDF: all financial reports, trial balances, tax returns. Save to external hard drive and cloud storage. You're legally required to keep financial records for 7 years in NZ.

DO: Schedule Follow-Up Review

Book time with accountant 4-6 weeks after go-live to review first month's financial statements, reconciliations, and GST return. Catch any systematic errors early.

DON'T: Make Major Chart of Accounts Changes Post-Migration

Once you've started using new system, avoid restructuring chart of accounts. This creates comparative reporting problems. Get chart of accounts right during setup phase.

DON'T: Ignore Training Needs

Staff won't magically know how to use new software. Invest in training (vendor webinars, video tutorials, hands-on practice). Budget 5-10 hours per staff member for initial training.

Common Migration Pitfalls to Avoid

Learn from others' mistakes. These are the most common (and expensive) migration errors:

Pitfall 1: Migrating Mid-Financial Year

Problem: Your financial year is split across two systems. Generating annual reports requires combining data from both systems. Tax returns become complicated.

Solution: Migrate at start of financial year (April 1 for most NZ businesses). If you must migrate mid-year, do it at start of quarter and plan for extra accountant fees at year-end.

Pitfall 2: Incorrect Opening Balances

Problem: Most common error. Opening balances don't match old system trial balance. All subsequent reports are wrong. Takes months to discover and fix.

Solution: Triple-check opening balances. Reconcile balance sheet line by line with old system. Have accountant validate before going live.

Pitfall 3: Not Cleaning Data First

Problem: Migrating dirty data (unreconciled accounts, duplicate customers, uncoded transactions). Garbage in = garbage out.

Solution: Spend 1-2 weeks cleaning old system before migration. Reconcile everything. Fix errors. Don't migrate historical mess.

Pitfall 4: Trying to Migrate Everything

Problem: Attempting to import 10 years of transactions. Migration takes months. Data errors multiply. Overwhelmed by complexity.

Solution: Migrate opening balances only. Keep old system for historical reference. Starting fresh is faster, cleaner, and lower risk.

Pitfall 5: No Professional Help

Problem: DIY migration without accounting knowledge. Make fundamental errors in chart of accounts setup or opening balances. Don't discover until tax time.

Solution: Pay accountant $500-$2,000 for migration assistance. They've done this hundreds of times. Worth every dollar.

Pitfall 6: Insufficient Testing

Problem: Going live without testing workflows, reports, integrations. Discover problems when processing first payroll or GST return.

Solution: Spend full week testing every function. Run parallel for 1-2 weeks. Don't skip validation phase.

Pitfall 7: Deleting Old System Too Soon

Problem: Canceling old software subscription immediately. Then need to reference historical data but can't access it.

Solution: Keep old system active for 6-12 months (read-only). Create comprehensive backups before canceling. Export all reports to PDF.

Pitfall 8: No Staff Training

Problem: Expecting staff to figure out new software on their own. Leads to errors, frustration, resistance.

Solution: Invest in proper training. Vendor webinars, video tutorials, hands-on practice sessions. Budget 5-10 hours per person.

Migration Costs & Timeline

Realistic budget and timeline for accounting software migration in NZ:

Timeline (Total: 6-8 Weeks)

  • Weeks 1-2: Planning & preparation
  • Week 3: Data cleanup in old system
  • Weeks 4-5: New system setup & data migration
  • Week 6: Testing & validation
  • Weeks 7-8: Parallel running & go-live

Faster Migration (3-4 weeks): Possible for very small businesses (sole trader, simple accounts) with professional help.
Slower Migration (10-12 weeks): Common for complex businesses (multi-location, extensive inventory, custom chart of accounts).

Cost Breakdown

Small Business (1-10 Employees, Simple Accounting)

  • • New software (first 3 months): $75-$210 (Xero/MYOB $25-$70/month)
  • • Old software (overlap period): $25-$70 (1-2 months)
  • • Accountant/bookkeeper assistance: $300-$800 (3-5 hours)
  • • Owner time: 15-25 hours (@ $50/hour = $750-$1,250 opportunity cost)
  • Total: $1,150-$2,330

Medium Business (10-50 Employees, Complex Accounting)

  • • New software (first 3 months): $210-$330 (higher plan)
  • • Old software (overlap period): $70-$220
  • • Professional migration consultant: $1,500-$3,000 (10-20 hours)
  • • Staff training: $500-$1,000 (vendor training, internal time)
  • • Management time: 30-40 hours (@ $75/hour = $2,250-$3,000)
  • Total: $4,530-$7,550

Large Business (50+ Employees, Very Complex)

  • • New software (first 3 months): $285-$600
  • • Old software (overlap): $110-$330
  • • Professional migration service: $5,000-$15,000 (full-service migration)
  • • Integration setup: $1,000-$3,000 (payroll, POS, custom APIs)
  • • Staff training: $2,000-$5,000 (multiple staff, comprehensive training)
  • Total: $8,395-$23,930

Is Professional Help Worth It?

DIY Migration: Costs $200-$500 (software only), takes 40-80 hours of your time, high error risk
Professional Migration: Costs $1,500-$5,000, takes 10-20 hours of your time, low error risk

For most businesses, professional help pays for itself through time savings and avoiding costly errors. Consider DIY only if you: have accounting background, business is very simple, and your time has low opportunity cost.

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