Switching Accounting Software Mid-Year, Such as From Xero

Changing accounting software sounds like a job for 1 July. In practice, many small businesses switch mid-year because a subscription renews, the business changes, or they want something simpler. A mid-year switch works well if you plan the cutover around your BAS and keep your old records accessible.

This guide uses Xero as the example because it is a common choice for Australian small businesses. Xero is a capable, mature product with a large ecosystem of accountants and add-ons, and switching away is usually about fit. The same steps apply to MYOB, QuickBooks or any other system.

In short

Pick a cutover date at the end of a BAS quarter, such as 30 September or 31 December.
Export the trial balance, contacts, open invoices and bills, and detailed transaction reports as at the cutover date.
Enter opening balances in the new software and check they match the old trial balance.
Run both systems in parallel for one quarter and compare the BAS figures.
Archive your old data in a format you can open without a subscription. Keep it for at least 5 years, or 7 for a company.
Only then cancel the old subscription.

Step 1: Pick a cutover date

The cleanest cutover date is the last day of a BAS period. If you lodge quarterly, that means 30 September, 31 December, 31 March or 30 June. Everything up to and including that date stays in the old system. Everything after it goes into the new one.

That way each BAS is prepared entirely in one system.

Before you commit, finish the old system’s work for the quarter:

reconcile every bank account to the statement closing balance at the cutover date
record all sales, bills and receipts dated on or before the cutover date
lodge, or at least finalise, the BAS for the quarter ending on the cutover date

Tell your accountant or BAS agent your plan early. If you switch mid-year, they will need data from both systems at year end, so agree on what they need.

Step 2: Export from the old software

Export at the cutover date, after the final reconciliation. From Xero, the main items are below. Xero Central has step-by-step instructions for each, and the menus change from time to time, so follow the current help article.

What	Why you need it	Xero help
Trial balance at the cutover date	Your opening balances	Trial Balance report
Contacts	Customers and suppliers, with ABNs	Export contacts from Xero
Invoices and bills	Unpaid items at cutover, and history	Export invoices and bills
General ledger or account transactions	Full detail behind every balance	Export accounting data out of Xero
Reports such as profit and loss, balance sheet, aged receivables and payables, and GST reports	Year-to-date figures and an audit trail	Export or print a report

Also save copies of each BAS lodged from the old system, your chart of accounts, and any attachments such as receipts and tax invoices. Check Xero Central for the current options for downloading files, as attachments may need more effort than reports.

Export reports in both PDF (readable forever) and a spreadsheet format such as CSV or Excel (searchable and reusable).

Step 3: Bring in opening balances

Your opening balances in the new software are the closing balances from the old trial balance at the cutover date. Enter them as a single opening balance entry, then check:

total debits equal total credits
each bank account balance matches the bank statement at the cutover date
the GST accounts match the old system and the BAS lodged for the last quarter
the balance sheet in the new software matches the old balance sheet at the cutover date, line by line

Unpaid invoices and bills

If you have unpaid invoices or bills at the cutover date, bring them in individually rather than as one lump sum. That way, when a customer pays in the new quarter, you can match the payment to the right invoice.

Take care with GST here. If you account for GST on a cash basis, GST on invoices raised before the cutover may only be reported when they are paid, which will be in the new system. Ask your accountant how to set these up so the GST is neither missed nor counted twice.

Mid-year profit and loss

Because you are switching mid-year, the new system starts with balance sheet figures only. Year-to-date income and expenses are usually rolled into equity in the opening entry, or entered as summary totals. Agree the approach with your accountant, because it affects how year-end reports are prepared.

Step 4: Run both systems in parallel for one quarter

For the first quarter after cutover, enter transactions in both systems. It is extra work, but it finds setup mistakes before they reach a BAS.

At the end of the quarter, compare the two:

Check	What to look for
G1 total sales	Same figure in both systems
1A GST on sales	Same, to the cent
1B GST on purchases	Same, to the cent
Bank balances	Both match the statement
Profit and loss for the quarter	Same totals by category

Small differences are normal at first: a transaction coded differently, GST rounding, a missing receipt, or a payment in a different period. Investigate each one and write down the explanation. Lodge the BAS from whichever system you have checked, and only drop the old one once you trust the new figures.

Businesses with GST turnover under A$10 million generally use Simpler BAS, which only needs G1, 1A and 1B, so the comparison is short.

Step 5: Archive the old data

The ATO says you need to keep most business records for 5 years, and some for longer, according to its record keeping rules for business. Companies must keep financial records for at least 7 years, according to ASIC.

The ATO’s guidance on digital record keeping specifically says to download a complete copy of any records stored in the cloud before you change software provider and lose access. Store the archive somewhere backed up, with a note explaining each file.

Step 6: Cancel the old subscription

Cancel only after the parallel quarter is finished, the BAS is lodged, and the archive is complete. Xero’s common questions page explains that cancelled data is archived and cannot be accessed while archived, though it can be restored by reactivating the subscription for a period unless you ask for it to be deleted. Check the current terms in Cancel your Xero subscription before you cancel.

Switching checklist

Questions

Can I switch accounting software in the middle of a financial year?

Yes. Use the end of a BAS quarter as the cutover date so each BAS comes from one system, and give your accountant data from both systems at year end.

Do I need to move all my historical transactions?

Usually not. Opening balances at the cutover date, plus unpaid invoices and bills, are enough to continue. Keep the full history in your archive.

What happens to my Xero data after I cancel?

Xero says cancelled data is archived and cannot be accessed while archived, but may be restored by reactivating. Do not rely on that: export everything first.

How Foderis helps

Foderis is built for this kind of fresh start. You import bank files with AI-suggested categories that learn your rules, connect Stripe directly, and get Simpler BAS figures ready to copy, which makes the parallel-quarter comparison quick. Your accountant can be given access, data is hosted in Sydney, and you can export everything at any time. It costs A$9 a month, with a 30-day free trial.

This is general information, not tax advice. Your situation may differ: check with your accountant or the ATO.