Changing accounts software in a practice

The checklist

1. Choose the timing

   Move each client at a clean break: after a year end has been filed, or after a VAT return has been submitted, so that each period sits in one system.

2. Export the client list

   Export names, company numbers, UTRs, VAT numbers and year ends as a CSV file.

3. Export trial balances

   For each client, export the trial balance at the last year end, and the year before for comparatives.

4. Export the history

   Keep the filed accounts, tax computations, VAT returns, payroll year-to-date figures, fixed asset registers and open sales and purchase invoices as files the practice controls.

5. Keep MTD records linked

   Under VAT Notice 700/22, once data is in software any transfer must be by digital link. An XML or CSV import counts. Cut and paste does not. Moving a client part way through a VAT period means importing that period's records as a file.

6. Connect the new software to HMRC

   Software for Making Tax Digital is authorised by signing in with the practice's agent services account. HMRC's MTD for VAT agent guidance says to ask the software supplier how.

7. Check the client authorisations

   Client authorisations are held against the practice's agent services account or HMRC online services for agents account (GOV.UK). They stay with the practice when the software changes. A change of legal entity is different: HMRC says a new entity needs a new agent services account and new authorisations (GOV.UK).

8. Run both in parallel for one period

   Prepare one return or one set of accounts in both systems and compare the results before the old system is switched off.

9. Keep read access to the old system

   Keep a login or a full export for the retention periods below.

Checks after each client moves

• The opening balances agree to the closing balance sheet in the last accounts filed at Companies House.
• The VAT control account agrees to the last VAT return submitted, and the next VAT period starts the day after the last one filed.
• Bank balances agree to the statements at the changeover date.
• Payroll year-to-date pay, tax and National Insurance agree to the last Full Payment Submission.
• Fixed asset cost, depreciation and capital allowance pools agree to the last computation.
• Each client's year end, VAT stagger and Self Assessment status is correct, so the deadlines are right.
• Clients have been told where to send records from now on.

How long records must be kept

Original documents

VAT Notice 700/21 says that if invoice details are keyed into software by hand, the original invoices must still be kept. If the software captures and keeps a complete image of each invoice, the paper originals are not needed for VAT. Check this for each client before old paperwork is destroyed.

Questions