Are you considering switching your accounting software?
Before you do, it is important to understand the process of how to move from Sage to Xero
This article is going to explain the different options available and help you to understand the steps involved.
When is the best time to make the switch?
Generally, the best time to make the switch is at the company financial year end. The reason this is the best time is because the data can be brought into the system in a straightforward manner and there is a defined cut off point. It is not impossible to make the move at other times throughout the financial year however this does make the process slightly more complex.
do I need to do anything in sage before migrating to xero?
It is always a good idea to clean up the data in Sage before bringing into Xero.
We recommend speaking to your accountant before doing this just in case you change any numbers that they have reported on.
The tidy up tasks would generally include:
1) Make sure that the Sage 50 system matches the last filed accounts at the same date
2) Check that the bank balances in Sage match your actual bank balance
3) Check if all invoices due are actually due. It may be that there are some errors in the system or some may be bad debts that need to be written off before migration
4) Check that all bills due are really due. These may have been paid personally or are duplicates in the system
5) Check that the VAT returns are reconciled in Sage and that they match the VAT filed with HMRC
6) Run the detailed aged debtors and creditors reports in Sage and check that payments have been matched with invoices. If there are unallocated payments on account, match these before the migration
what data should be brought over from sage into xero?
There are 2 clear ways that you can bring data into Xero from Sage:
1) Convert up to 2 year’s historical data from Sage into Xero using a conversion tool such as Movemybooks
2) Manually enter opening accounting balances into the system at the financial year end date and don’t bring forward historical data
which of these 2 options should be used?
Let’s explore each of the options in more depth to help you make a decision about which is best for your business:
Convert data from Sage 50 to Xero using Movemybooks
Using Movemybooks is an easy option on the face of it and it often works well.
There are a number of steps involved in this process and we have summarised them below.
Step 1 – Create a Movemybooks account
Step 2 – Set up a new Xero subscription and ensure the account is empty
Step 3 – Choose how many months historical data should be imported into Xero. Up to 24 months is free of charge, additional years after this are chargeable
Step 4 – Set the financial year end date and the date you want to bring transactions in up to
Step 5 – Upload data (to do this you will need to download the extractor tool and you will need to have the Sage 50 file open)
Step 6 – Follow the steps to set up the new Xero account and finalise the conversion
And that’s the conversion complete into your new Xero account, however don’t forget to complete the post conversion tasks. Sounds easy right?
It is relatively easy until you read the limitations of Movemybooks or have fixed a few failed DIY conversions.
Movemybooks are very transparent about the limitations of the software however sometimes we find people fail to read these before embarking on a conversion. As Xero consultants we would recommend that you read these limitations in depth before making the move from Sage 50 to Xero using Movemybooks conversion software.
The main benefit of using this option is having access to historical information such as customer data and comparative figures so that you can compare year on year.
Manually entering opening balances into Xero
This option takes a little longer but gives you more control to configure your new Xero system the way you want it.
There is an argument that when using a conversion tool like Movemybooks, you lose the ability to draw a line in the sand and create a new system that is fit for purpose for the future.
The summarised steps involved to transfer from Sage 50 to Xero manually are as follows:
Step 1 – Think about what you want from the new system reporting
Step 2 – Set up a new Xero subscription
Step 3 – Configure the chart of accounts
Step 4 – Configure the settings in Xero
Step 5 – Choose the VAT scheme and financial year end in Xero
Step 6 – Map the old chart of accounts in Sage50 to the chart of accounts in Xero
Step 7 – Link up your bank accounts
Step 8 – Bring in opening balances from the trial balance in Sage 50
Step 9 – Import the individual invoices and bills which have not been paid at the year end
Step 10 – Once the statutory accounts are completed and filed, adjust the opening balances so that the system matches the filed accounts
This is a slightly more complex process however the benefits of being able to build a new system that gives you the reporting you need for the future generally outweighs the time invested to manually create a new system.
You may have previously had one sales code in Sage 50 however now you may want to split this into 4 revenue streams so that you get more insight into the numbers in your business. Setting up a new reporting structure allows you to get better management information so that you can make better and quicker decisions for your business.
What is the best approach to use?
We would recommend chatting to one of our experienced Xero consultants before embarking on a migration from Sage 50 to Xero so that you get the optimal outcome for your business.
Empowered by Cloud have completed hundreds of Xero conversions and can recommend the best approach that is in line with your goals.
We can run the conversion for you or provide an online consultant to help you to manage the process internally.
Leverage Xero Insights with Empowered by Cloud
Here at Empowered by Cloud, we specialise in helping businesses make the most of their Xero accounting software. As Xero consultants, we’ll work with you to create efficient financial systems and uncover valuable financial insights. With us by your side, you’ll have a better understanding of your business and financial future.
Contact us to learn more about our services and how we empower small businesses like yours.