if you need to change accounting systems or even make a new file for a fresh start then this course
is the right place for you but before we get started you should know that there are two ways to
change over from one accounting system to another you could do a data import and if you do that you
could use special software and simply copy over all the transactions from the old file to the new
file or the old system to the new there's really nothing to learn other than that software or that
feature that copies everything over however if you don't import the old data from the old
system it means that you're making what we call a fresh start and if you make a fresh start you
have to know the techniques that will be taught in this video series so that all your numbers
can fit together properly in the new system now if you choose to import data then you can
watch the course on importing data on this very website it will clearly explain all the options
you have for all of the features in QuickBooks and QuickBooks online that will help you switch
over from an old file to a new file or an old accounting system to a completely new software
and again it talks about features and software that will do everything for you and there are no
special accounting techniques to learn however in this course we don't import the data we will use
the new system to make what we call a fresh start and that means that everything will be correct as
of a declared start date or transfer date so we know in the new system that we're starting fresh
all areas of data have correct beginning balances as of the start date that's our goal when we do
this course and we transfer everything over to a new system however if you need to find older
transactions you can just open the old system or the old file for any information that relates to
older past transactions but don't worry shortly after the transfer you will need the old system
less and less as you get further into the future and furthermore any currently relevant transaction
will be in the new system if you use the methods that we learned in this course so everything will
fit together perfectly and you will still be able to access anything you need so it's clear we must
find the ending balances of each account in our chart of accounts from the older system and those
results would usually go on management related reports but no matter how antiquated your system
is or no matter how advanced your new system is the ending of the old must equal the beginning
of the new in order for you to know that you did everything correct now don't worry about using
two different systems you'll use the old system to find transactions before the start date but
what you could do is what's called a one-month overlap this means use both systems for one month
after the conversion date and then this way you know for sure that all of the currently relevant
transactions will be in the new system but even if you don't use a one month overlap we're still
going to show you what currently relevant transactions are and how you need to put them
in to the new system so let's define currently relevant transaction it's a transaction in this
type of situation that we know in the future will be used to make another transaction now the setup
you can import or type in one by one only the currently relevant transactions and then you can
use the other techniques taught in this course to bring over everything else so there's still
some data entry to this course but only for the ones that you will need immediately in the new
system some examples of currently relevant transactions are open invoices that we will
receive payment later for unpaid bills that we expect to pay later on deposited payments that
we will deposit later any open purchase orders or open sales orders for merchandise inventory that
we have not yet sent or received or any incomplete estimates for jobs where you're a contractor doing
progress invoicing you will have to send invoices later for those estimates and then you will have
to get paid for those invoices so an open estimate for an open contract would be a currently relevant
transaction because it's something that you are still working on and it's something whose details
you would need to have in the new system so how does it all fit together the numbers must match
now the old systems ending numbers must be the same as the new systems beginning numbers for the
same date but for all areas of data not just the trial balance and the chart of accounts we know
that the main area of data comes from the chart of accounts and the general ledger but these accounts
must reconcile and match with peripheral or subsidiary areas of data for example this
t-account accounts receivable the total balance must match the total of all the balances of all
the customers in the separate area of accounts receivable customer records it's the same thing
for this account accounts payable the balance in the general ledger must match the total of all
the balances of all the money that you owe to each vendor from the separate accounts payable vendor
records and if we had a merchandise business it means that there would be a t-account in your
chart of accounts called inventory and the balance of the inventory account would have to equal the
totals of all the quantities of the inventory on hand at the moment that you transferred from the
old system to the new now the first example you see of transferring over to a new system should
be a very simple company it should be a company that has no areas of data besides the general
ledger this means no accounts receivable no accounts payable no inventory quantity to
track examples of these types of companies would be a corner store that just has a cash register
and doesn't really track the quantity of their inventory or any simple service business that
pays their bills on time and only accepts cash payment at the moment that they get the service
in situations like that it's incredibly simple to switch over to the new accounting system all you
have to do is make one big fat journal entry for the balances in the trial balance of the
old system just take the ending balance of each account in the trial balance as of the transfer
date and make that the beginning balance of the new system by making one big fat simple
journal entry for example let's imagine this is the trial balance of a simple service company as
of the transfer date all you have to do is make the same debits and credits that are listed here
as the ending balances and put them as entries in a big journal entry in whatever system you're
transferring over to the picture on the screen here is the journal entries window from the
QuickBooks desktop version of the software and all you would have to do is open it up and put
in the debits and credits exactly as you see on the trial balance and you'll be ready to use the
new system from that moment forward even if you were using quickbooks online quickbooks online
also has a journal entries window and all you would have to do is enter one by one the ending
balances of each of the accounts and the chart of accounts of the old system and put them in
one by one in the journal entry window making sure you have the correct name and the correct
amount of debit and credit once you save that journal entry your new system will be ready to
use let's call this journal entry the main setup journal entry and you can only do the main setup
journal entry only after all of the other areas of data have been put in that's the way to get
everything to fit in together and I'm going to show you in this course how to set up receivables
and payables first before making the main setup journal entry so that everything fits together
smoothly if you're not comfortable with journal entries you can watch this course accounting
journal entries for kids it will give you all the knowledge and skill you need to be able
to make any kind of journal entry especially the journal entry you will need for this course but no
matter what type of company you have this course will show you how to change over to a new system