Checking a software switch: how to prove your books match to the cent

Why prove it

A software switch is the one time every balance in your books is copied at once. Most programs and most migrations get it right. But "the numbers look about right" isn't a standard you'd accept from a bank, and your accountant won't accept it either. A tie-out is a short, written comparison that shows the new books equal the old ones, so that when a question comes up at year end the answer is "we checked", with the paper to prove it.

You need the old program's reports as of your switch date, exported before you cancel: trial balance, A/R and A/P aging detail, bank reconciliation report, payroll summary and sales tax reports. Our QuickBooks Online export checklist lists them; Xero and Wave have their own. Put each old report next to the same report from the new program, for the same date, and go down this list.

1. Trial balance at two dates

The trial balance lists every account's balance. Compare it at two dates:

• The day before your switch date. This proves the opening balances.
• The last day of the history you moved, if you moved history. This proves everything in between, in total.

Compare account by account, not just the totals. Debits always equal credits on any trial balance, so matching totals prove nothing. Watch for three things:

• Retained earnings and this year's profit. Programs differ in how they show income and expense on a trial balance. Some show the fiscal year to date with earlier years in retained earnings; others show more. Run both for the same basis (accrual or cash) and the same fiscal year start.
• Opening Balance Equity. If the new program uses one, it should be zero, or moved into your equity accounts, once everything is in. Anything left there is a balance that went in on one side only.
• Accounts that were merged or renamed. Add them up before comparing, and note the mapping.

2. A/R and A/P, name by name

The A/R total can match while two customers' balances are swapped. Compare the A/R aging on the switch date customer by customer, and the A/P aging vendor by vendor. Then:

• The aging total should equal the A/R (or A/P) account on the trial balance for the same date. If it doesn't, there is an entry hitting A/R without a customer.
• Spot-check a few customers' open invoices: number, date, due date and open amount. Aging buckets depend on due dates, so a missing due date shows up here.
• Unapplied payments and credits should be on the same customers in both programs.
• If you use projects or jobs, check the customer totals first, then the open projects. Our projects guide explains why past splits between projects can differ.

3. Bank and card balances

For each bank and credit card account, the new books' balance on the switch date should equal the old books' balance on the same date, which is the statement balance adjusted for outstanding items. The best proof is your first reconciliation in the new program: if the first statement after the switch reconciles to zero with no adjustment, the bank balance was right.

4. Payroll totals

If you moved payroll mid-year, the year-to-date figures are what the year-end forms are built from. Compare a payroll summary for the calendar year to date in both programs:

• Gross pay, each tax withheld and each employer tax, in total and for each employee.
• In the US: federal income tax, Social Security and Medicare, which feed the 941 and W-2. In Canada: CPP, EI and income tax, which feed the T4 and your remittances.
• Payroll liabilities on the trial balance against what you still owe on your last remittance.

A W-2 or T4 that is wrong because a migration dropped one pay run is a nuisance to fix in February. It is easy to catch now.

5. Sales tax

The sales tax payable account on the trial balance should equal what you owe for the open filing period. Run the sales tax or GST/HST report for that period in both programs and compare tax collected and, in Canada, input tax credits. Then file the first return after the switch from the new program's report and check it reasonably matches the trend of your last few returns.

Write it down

A tie-out you can't show anyone is only half done. Keep a one-page record in the same folder as your exports:

Save each pair of reports as PDFs next to it, and note who did the check and when. If a difference is accepted, say why: "inventory valued at average cost instead of FIFO, $14.20" is a sentence your accountant can work with; an unexplained difference is a question you'll be asked later. Once the sheet is complete, lock the period before the switch date in the new program so nobody changes the opening figures by accident. In AcboBooks that is the closing date, with an optional password.

How AcboBooks checks a QuickBooks move

When you move from QuickBooks Online to AcboBooks, much of this list is done for you, before and after the import.

Before anything is posted, AcboBooks checks that your exports agree with each other:

• For full history, the opening trial balance plus every Journal transaction must equal the closing trial balance, account by account. If not, it says which accounts are off and by how much, and why it usually happens (a Journal for the wrong dates, or loaded twice).
• The A/R and A/P Aging Detail reports must add up to the trial balance's A/R and A/P on the same day. If not, something was changed in QuickBooks Online between exports, or an Open Invoices report shows today's balances instead of that day's.
• Anything still missing, such as the trial balance for the day before the history starts, is listed as Still needed before importing.

After the import, it shows Trial balance vs QuickBooks on the last day: every account with QuickBooks' figure, AcboBooks' figure, and matches or differs by. It also counts each type of transaction in QuickBooks against what was imported, already in or failed. If something is wrong, Undo import takes it back out.

That covers the trial balance and the totals. It doesn't replace looking at aging by name, your first bank reconciliation, the payroll year to date and the sales tax account, so do steps 2 to 5 yourself. Afterwards, Books Checkup in AcboBooks looks for everyday problems such as bills entered twice, money never deposited and accounts not reconciled. It reads the books and changes nothing.

Moving from Xero, Wave or another program, AcboBooks imports lists, balances and transactions from Excel or CSV but has no automatic tie-out. Run the five checks above by hand. They take an hour or two, and they are the hour or two you'll be glad of later.

QuickBooks® is a registered trademark of Intuit Inc. Xero is a trademark of Xero Limited. Wave is a trademark of Wave Financial Inc. AcboBooks is not affiliated with, endorsed by, or sponsored by any of them.

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