Moving away from Xero can seem like a daunting prospect.
You might have used it for years. Your financial history is stored there, receipts and invoices are attached to transactions, your bank accounts are connected, and everyone has become used to how it works.
Even if you are tired of the cost, or find Xero more complicated than your small charity really needs, the thought of changing systems can make it tempting to just keep paying for it.
The good news is that changing accounting systems does not have to mean manually rebuilding years of financial records one transaction at a time.
If you are moving to something simpler and more purpose-built for a small charity, such as the Good Numbers app, you can choose a sensible cutover point, move the information you actually need, safely retain the rest, and carry on from there. Plus, the Good Numbers team is here to help with the process.
Many of the same principles in this guide also apply if you are moving from Xero to another accounting product or even back to a manual cashbook spreadsheet.
In this article:
From an accounting perspective, the beginning of a new financial year is often the cleanest time to change systems. For example, if your financial year ends on 31 March, you might finish everything up to 31 March in Xero and use your new system for the new financial year starting 1 April. That creates a nice clear boundary. Your previous financial year sits in one system and your new financial year sits in another.
If you are GST registered, it is also worth considering your GST periods. Ideally, change systems at the end of a complete GST period rather than trying to divide one GST return across two accounting systems.
There is no rule, however, that says you have to make the switch on the first day of the financial year. If you decide to change systems in May, for example, you can still set up your new system from 1 April and work backwards through the first month or two of transactions.
The practical workload of your organisation matters too. If April and May are your busiest months of the year, there is little benefit in creating another job for your treasurer at exactly the wrong time. A quieter period may be a much better opportunity to make the change.
You do not need to cancel Xero one day and have your replacement completely operational the next. Give yourself some overlap.
There may be a short period when you are paying for two systems while you complete the migration and make sure everything you need has been copied over. Build this into your expectations rather than trying to minimise the overlap at all costs.
Good Numbers, for example, has a two-month free trial, which gives organisations time to get set up while they still have access to Xero.
We would not usually recommend running both systems fully in parallel, though. It can sound reassuring to enter every transaction into both systems for a month or two and compare the results. In practice, this often just creates twice as much work. You can then spend time investigating why two reports differ slightly only to discover that somebody changed a transaction in one system and forgot to make the same change in the other.
Once you have chosen your cutover date, aim to stop doing your day-to-day financial management in Xero from that point. Keep access to it while you complete reporting, migration or historical checks, but use your new system as the source of truth for new activity.
Before changing systems, take a few minutes to work out exactly what Xero currently does for your organisation.
For a small charity, that might simply be:
But some organisations use considerably more.
You might have several bank accounts connected. You might also have PayPal or Stripe accounts feeding information into Xero. You might use Xero Payroll, create invoices, enter bills or rely on another product that integrates with Xero.
Write these things down. You do not necessarily need your new accounting system to replace every one of them, but you do need to know what will happen to each one when you leave Xero.
If you are considering Good Numbers and are unsure whether something you currently use is supported, talk to us before making the change. We can work through your current setup with you.
Not every accounting product works in the same way. Xero is a full double-entry accounting system designed to work for businesses and organisations with a wide range of accounting requirements.
Good Numbers is designed differently. It is a cashbook built specifically around the financial management and reporting needs of small charities and non-profits.
If you have used Xero in a straightforward way - reconciling bank transactions, categorising them and attaching supporting documents - this difference may make very little difference to your migration. We can generally work with you to bring across the useful transaction information, including categorisation and supporting files attached to bank transactions.
If you have made extensive use of functions such as bills, invoicing, manual journals or multi-currency accounting, there is more to think about. Those records do not necessarily translate directly into a cashbook.
That does not automatically mean you cannot move. It means we need to understand how you have used Xero and work out what information needs to be preserved and how your organisation will manage those functions in future.
Read: Good Numbers vs Xero: which accounting app is better for small NZ charities?
One of the biggest misconceptions about changing accounting systems is that everything in the old system must be recreated in the new one. It does not.
Registered charities need to retain their financial records for seven years. Charities Services specifically notes that charities' financial records relate to tax and must be retained for seven years, while Inland Revenue requires relevant records to be retained for at least seven tax years.
Those records can be electronic. They do not all have to live inside your current accounting software. Inland Revenue lists things such as bank records, invoices, receipts, information about assets and liabilities, and cashbooks among the records that may need to be retained.
So there are really two separate questions:
What records do we need to keep?
and
How much of that history would actually be useful inside our new accounting system?
Good Numbers can work with you to migrate historical information from Xero, and there is no fixed limit on the number of years that can be brought across. But more is not always better.
For many organisations, having the current year and perhaps the previous year or two available in detail is genuinely useful. Older information may be perfectly adequate as a secure historical archive that can be referred to if it is ever needed.
If you move to Good Numbers, we will work through this with you. You do not need to decide what Xero exports to run or spend days downloading everything just in case.
Keep your Xero account active until the migration and archiving process is complete. We can then either undertake the necessary migration work or tell you what information needs to be retained before you cancel your subscription.
The system you use to manage your organisation's money is an important part of your financial controls. We recommend getting the support of your board or committee before making the change and recording the decision in your meeting minutes.
That does not mean your board needs to conduct a detailed investigation into accounting software. But they should understand why the change is being made, what system will replace Xero and be comfortable that financial information will remain appropriately managed.
If your organisation uses an accountant, bookkeeper or another person with financial expertise, it is also worth talking to them. Explain why you are considering making the change and ask what information they actually need from your accounting system.
Read: Meet the Good Numbers App
Accountants, reviewers and auditors are understandably very familiar with Xero. It has been widely used for a long time and many accounting practices use it every day. That does not mean a small charity is required to use Xero in order to have good financial records.
What matters is whether your records are complete, reliable and supported by appropriate evidence. For example, Good Numbers maintains an audit history of changes made to transactions and allows receipts, invoices and other supporting evidence to be attached to transactions, along with additional notes. It can also produce the year-end financial information required by small charities.
If someone helps prepare, review or audit your accounts, talk to them about the information they need rather than assuming they need you to maintain a Xero subscription simply because that is the system they are most familiar with.
Changing accounting systems does not need to become an enormous clean-up project. What matters most is having confidence in your position at the point where one system ends and the next begins.
Before switching, we recommend:
If the cutover is also your financial year end, you should be reasonably confident that the previous year's accounts are complete. That does not mean absolutely nothing can ever change. Small year-end adjustments sometimes arise later and can be dealt with.
The aim is a reliable starting position, not perfecting every transaction your organisation has entered since 2008.
Read: What is Tier 4 Reporting, Why Is It Required, and How Do I Do It?
For a charity, your bank balance does not always tell the whole story.
Imagine you have $50,000 in the bank at your cutover date. Of that:
Your new system needs to understand that position too.
Good Numbers includes specific grant-tracking functionality, so if you are already tracking active grant balances in Xero or elsewhere, we can work with you to establish the correct opening position.
If you are unsure what those balances should be, talk to us as part of the onboarding process.
GST creates one additional consideration when choosing your cutover date. Good Numbers requires you to manage a complete GST period within the app. You cannot start halfway through a GST period and have half of that return prepared in Xero and the other half prepared in Good Numbers. So if you file GST every two months, for example, choose the beginning of one of those GST periods as your Good Numbers starting point.
Good Numbers currently supports GST on a payments basis. If you use invoice-basis GST, you will need to consider this before switching.
Amounts still payable to or refundable from Inland Revenue for a GST return completed in your previous system are not a problem.
Occasionally you may also discover later that a debit or credit adjustment is required for a GST period completed before you moved to Good Numbers. We can help with these adjustments. They are not exposed as a normal user function because they are relatively uncommon and keeping them out of the day-to-day interface makes GST simpler for most users.
Connecting your bank account to Good Numbers does not mean it needs to be immediately disconnected from Xero. There is no problem with both applications receiving information from the same bank account during your overlap period.
Good Numbers will usually retrieve up to approximately 18 months of transaction history when your bank is connected. If earlier transactions are needed, we can also work with you to import those.
That means you do not have to sign up on 1 April to start your Good Numbers financial year on 1 April. If you sign up in May or June, for example, you can still start from the beginning of the financial year and work back through those transactions.
Once you eventually cancel your Xero subscription, there is generally no separate need to disconnect your Xero bank feed simply because you have moved to Good Numbers.
If you are moving to Good Numbers, you are not given an importer and left to figure it out yourself. Our onboarding is deliberately hands-on from our team.
After you sign up, the Good Numbers team completes parts of your setup in the background. We can then work with you to understand how you have been using Xero, what information is useful to bring across and what can simply be retained as historical records.
The Xero migration process is partly automated, but it is managed by the Good Numbers team rather than being something customers need to run themselves.
Depending on your organisation, this might include:
If your organisation is a registered charity, Good Numbers also automatically retrieves relevant year-end information from the Charities Register as part of your setup. More detailed information from Xero can then be added where it is useful.
Because every organisation has used Xero slightly differently, we do not pretend that every migration is identical. We look at your actual records and work with you.
Read: Sign up for the Good Numbers app
A financial year end can be a convenient place to switch, but it does not mean you absolutely have to finish the previous year's reporting inside Xero. You have two options:
In fact, some organisations use their Good Numbers free trial to complete an entire year-end and produce their financial statements before they have paid anything for the app.
Which approach is best will depend on how complete your previous year's records already are and how much historical information you want available in Good Numbers.
Suppose your charity has used Xero for five years. Your financial year started on 1 April, but it is now July and you have decided you want to move to Good Numbers.
You do not need to wait another nine months. You can sign up for Good Numbers now and use 1 April as your starting point.
Good Numbers can retrieve the bank transactions from April onwards, and you can start categorising and managing the current financial year in the app.
Meanwhile, the Good Numbers team can work with you on the migration.
You might decide that having the last two years of detailed transactions and supporting receipts inside Good Numbers would be useful. We can work with you to bring that information across.
The older Xero records could instead be retained as a secure archive so that your organisation continues to meet its record-keeping requirements without cluttering your new system with information you rarely need.
If your previous year's accounts have not yet been completed, you could either finish those in Xero or talk to us about bringing that financial year into Good Numbers and completing the year-end there.
Once the migration is complete and you are satisfied that everything that needs to be retained has been preserved, you can cancel Xero.
Small charities often continue using software long after it has stopped being a particularly good fit.
Sometimes that is because changing feels difficult. But the fact that you have five or seven years of financial information inside Xero does not mean you are committed to using it forever.
Choose a sensible cutover point. Work out what functions your organisation genuinely relies on. Make sure your records are safely retained. Then move forward using the system that works best for the organisation you are today.
If you are considering moving from Xero to Good Numbers, talk to us. We can look at how your organisation currently uses Xero, help you decide what needs to come across, and manage the migration with you rather than leaving you to figure it out alone.
Start a free Good Numbers trial, or talk to us about what your migration would involve.
Ask Duncan anything — big or small. He’ll get back to you ASAP, and your questions will help improve the information here for everyone.
