Why people switch
Common reasons: an accountant who prefers another program, a need for payroll or inventory, outgrowing a simple tool, or a file that has become unusable.
Pick the cutover date
Many people switch at the start of a month or a fiscal year. You then load opening balances as of that date and begin recording in the new program. Keep the old program's file, read-only, so you can look things up.
What moves and what doesn't
Customers, vendors and the chart of accounts usually move through an export. Opening balances, open invoices and open bills have to be entered or imported. Full transaction history often does not convert cleanly, and many people choose to keep history in the old program and start fresh with balances.
Switching accounting software mid-year
You can change software at any point in the year, not only on January 1. The cleanest way is to switch at the end of a month, after you reconcile every account through that date. Then enter the year-to-date totals as opening balances in the new program, or load each month's summary, so the new file still shows the full year for your tax return.
Keep the old file, read-only, for the part of the year it covers. Your tax preparer will want one set of reports for the whole year, so export profit and loss and balance sheet reports from the old program up to the cutover date, and give them both sets.
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Do these before the switch
Reconcile every account in the old program through the cutover date. Clear or note open items. Export reports for the prior periods: profit and loss, balance sheet, customer and vendor balances, and the general ledger.
After the switch
Reconcile again in the new program and compare opening balances to the old reports. Reconnect bank feeds, payment processors and payroll. Tell your tax preparer what changed.
Worked example with numbers
You decide to switch on January 1. In the old system, finish December, reconcile every account and run a trial balance. In the new system, enter opening balances as of December 31 that match that trial balance: cash $18,400, receivables $9,200, payables $6,100, loan $12,000 and equity of $9,500 as the balancing figure ($18,400 + $9,200 - $6,100 - $12,000). Then enter open invoices and bills individually so the aging reports match the balances.
If receivables in the new system show $9,150 but the old aging said $9,200, you missed a $50 open invoice or credit. Find it before entering January.
Mistakes that cost money
Switching mid-month with no clean cutoff. Importing history without cleaning it first. Forgetting open bills and invoices. Cancelling the old subscription before exporting reports and attachments.
Check your work
Keep a full export of the old file. Compare the new system's January 1 balance sheet to the old December 31 balance sheet line by line.
Common questions
Can I change accounting software in the middle of the year?
Yes. Switch at the end of a month after reconciling, load year-to-date opening balances in the new program, and keep the old file for the earlier months so your tax preparer gets full-year reports.
How long does a switch take?
From days to a few weeks, depending on the size of the file and how clean it is.
Will I lose my data?
Not if you export and keep the old file. We always keep the old records available.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.