no matter what type of accounting system you're changing from or what type of accounting system
you're changing over to the principles and ideas are the same and I'm going to show you them in
this little video series there are basically two ways to change over to a new accounting system
either you import your old data from the old system or you do not import the old data from
the old system if you import your old data then you should watch the videos on this very website
about importing data but whether you import or not you must declare a start date for the
new system and all areas of data must match as of that particular start date that means that for all
of your books and records as well as all of your reports the balances at the end of the old system
must be the same as the beginning balances of the new system at the moment you change to the new
system I recommend you start with no data import at all the cleanest and easiest way is to use the
old system to find transactions before the start date if you need to refer back to old transactions
shortly after the transfer date you will need the old system less and less in fact you could even do
what we call a one-month overlap that means use both systems for one month after the conversion
date that will prove that everything is correct in the new system but starting with no import does
not mean that you will not do any data entry you still must input into the new system any currently
relevant transaction and a currently relevant transaction is a transaction that will be used to
make another transaction in the future for example open invoice if you have an open invoice you must
use that invoice to record receiving payment against that invoice in the future same thing
with the vendors unpaid bill you're going to make a bill payment in the future towards that bill
what about undeposited payments you're expected to make a deposit later open purchase orders
same thing if you had an open purchase order on the day that you transferred accounting systems
you're going to receive that order later so you have to put that open purchase order into the
new system any incomplete estimates for jobs with progress invoicing they're not finished with the
percentage of completion method so they have to be put in from the beginning and any transaction that
relates to those estimates also has to be put in so how do you fit it all together well the numbers
must match and as I mentioned the old systems ending numbers must be the same as the new system
beginning numbers not only for the same date but here's the point for all areas of data then the
question is what are the different areas of data that a company would have well every company would
have the general ledger and their results would go on the trial balance but not every company would
have accounts receivable and customer records but if you do the ending balances in the old system
must match the beginning balances and the new system for the same date same thing with accounts
payable merchandise inventory which you could always physically count but if you're using the
inventory module it means you have records of the quantity that have to match the ending quantity
in the old system to the beginning quantity on the date you switched to the new system and of
course sales tax follows the same principles but for our first example we're going to start
with a simple company that has no other areas of peripheral data except the general ledger this
company has no account receivable no payables no inventory quantity to track and no sales tax so
an example of a simple company that you could do in the way I'm about to show you would be a corner
store that simply has a cash register for the money coming in deposits it into the bank every
night and writes checks from the bank account for the simple expenses that they have in that case a
corner store only has a general ledger and nothing else what about a cleaning service they just show
up and you write them a check and sometimes they buy equipment but they don't have any other area
of financial data except their general ledger same thing with a delivery service and a repair service
basically any service that's usually done by a sole proprietor is a simple company that will only
have a general ledger setting up one of those types of companies would be incredibly simple
all you have to do is make one big fat journal entry on the day that you transfer accounting
systems you will use the numbers from the old systems trial balance as of the declared setup
date in order to make that journal entry here's an example of a typical trial balance of course
we will not be able to put in these three areas of peripheral data with our main journal entry
these three areas of data will have to be dealt with separately in future videos but if we didn't
have them we could simply open up the general journal window in QuickBooks or any software
that you're transferring over to and just make the same debits and credits that you see in the
trial balance that means any account listed on the debit side would have a debit in the one big fat
journal entry and any account listed on the credit side would also be credit in that big fat journal
entry that you make to setup the company and you could also do it in the journal entry window and
quickbooks online it does not matter what system you're transferring over to if you only have a
general ledger without receivables payables and inventory it means you're finished after you make
one journal entry that reflects the trial balance now for this course let's call that the main setup
journal entry and I'm going to show you that at the end of the course after we do the receivables
and payables setup we'll be ready for the main journal entry because that's the way it would
go in a real situation so watch the receivables and payables video then watch the exact actual
video where we follow step by step and switch over to a new accounting system I hope you enjoy
the course and I know you'll learn what you need to learn to switch over your accounting system