Making the Switch to FreshBooks? When Your Business Should Make the Move

Since you’re here, chances are you’ve decided to switch your current accounting software over to FreshBooks in the near future.

Hopefully, by now, you’ve also thought about what steps you need to make the transition, like establishing your cutoff date—the date you officially move to the new system. Your timing here impacts not just the transition itself but nearly every other part of your small business too.

So if you plan to switch to FreshBooks in the months ahead, keep reading to find out the best time to do so for your business and why.

The Best Time of Year to Switch to FreshBooks

Because of the amount of financial data you need to move from your existing accounting software to your new one, the best times to switch typically fall at the beginning or end of business cycles, like tax time or the new year. This makes for a “tidier” transition then if you decided to start smack dab in the middle of a quarter.

However, for most small businesses, the ideal time to switch to FreshBooks would be at the beginning of the calendar year (or fiscal year, if yours doesn’t line up with the calendar year). Here are a couple of reasons why:

• It’s easier to transfer all your data in one lump sum. Because the financial data from the previous year has already been organized and packaged neatly, it’s much simpler to migrate that data to your new FreshBooks account. Timesheet and payroll data also start afresh on Jan. 1, so you won’t need to transfer over any of that information.
• Many companies are slower at the beginning of the year. Additionally, many businesses see their operations ramp up slowly in January, making it a great time to set goals and prepare for the year ahead. During this lull, consider diverting some of your team’s time and effort into setting up and learning how to use your new online accounting software.

Keep in mind—the start of the year may not be the best time to switch to a new accounting system if most of your employees take vacation during this time or it’s busy season for your small business. Plus, you may already have a few team members dedicated to closing your books before the new year and other end-of-the-year accounting procedures.

With fewer people available to pitch in, the transition may take much longer (and eat up much more of your resources) than it should.

3 Other Practical Times of the Year to Change Your Accounting System

If the start of the new year is not going to fly, here’s a breakdown of other times to consider switching your solution, along with the pros and cons of each.

1. The Start of Q4

Because Q4 marks both the start of a new quarter and the beginning of the end of the year, this is another great time to move over to your new FreshBooks account. If you have the bandwidth, prepping your accounting system for the year ahead while wrapping up for the current year can give your business a head start.

And it’s easy to see why. A recent OnPay survey discovered that 41% of small business owners and managers handle their business finances themselves. In comparison, another 28% received an IRS notice or have been audited in the past—a problem likely exacerbated by the steep learning curve needed to file business taxes properly.

But when you’re organized and have reliable accounting processes in place, tax season isn’t so scary. The good news: If you weren’t as organized as you wanted this year, there’s no better time than now to plan ahead and make the proper changes.

Pro: You Have More Time to Iron Out the Kinks Before the New Year

You may already use software to maintain customer contact information, track inventory, manage projects, issue proposals, run payroll, or operate an e-commerce store. But if these tools don’t integrate seamlessly with your accounting software, you might experience transparency issues—and do a lot more work to stay on top of everything.

Giving your business a few extra months to figure out how your accounting software integrates with the rest of your tech stack ensures that you and your team can navigate and use the platform before Jan. 1 rolls around.

Switching to FreshBooks can benefit the rest of your financial and business processes, depending on the other tools you have in your lineup. With our platform’s wide breadth of integrations, you can connect seamlessly to apps and integrations you already use.

A united and integrated front across your business tools can support your taxes, reports, and business insights year-round. This helps you avoid the constant back-and-forth between platforms—which can ultimately create speed bumps on your organization’s road to efficiency.

Con: Q4 Is a Busy Time for Many Companies

The biggest drawback in switching accounting software during this time is especially relevant for e-commerce companies and other sellers that bring in the bulk of their sales and revenue during the holiday season.

Retailers are often deep in Black Friday sales and holiday orders, which means that a significant portion of their resources may already be allocated to these initiatives.

Additionally, transitioning to a new system during this time could mean that some of your accounting software’s financial data may fall through the cracks. So if you know your business deals with a large influx of sales or deliveries during this time, you may want to hold off on the switch until after the holidays.

2. Before Tax Season

In the weeks leading up to tax season, you’ll spend much of your time sifting through your expenses, financial reports, and other data to prepare your business tax returns, so why not take this opportunity to change your accounting software too?

If you do, you’ll have no choice but to get familiar with the system as you input data into the platform. By the time your tax returns are filed, your new software will be ready for you and your team to use.

Pro: Your Finances Will Be Organized Ahead of Tax Season

By this time of year, you should already be familiar with the tax documents and forms you’ll need, along with the transactions and reports required to prove the numbers on your returns. This is also a great time to ensure you’ve recorded all deductible expenses from your bank transactions and tracked your various income categories.

Next year, save yourself the last-minute scramble by setting up and modifying your accounting software’s expense categorization rules. With FreshBooks, the platform will automatically organize and categorize new business expenses as they’re imported from your bank account. This is key in preparing your expenses for tax filing.

For example, all the meals you ordered last year will be automatically categorized as “Restaurants/Dining” under “Meals & Entertainment.” The default categories in FreshBooks are user-friendly and tax-friendly, so they’ll directly correspond with the categories you need to use when filing your taxes.

Want more tips on organizing your finances ahead of tax season? Check out these lessons learned.

Con: You May Find Your Resources Spread Too Thin

Of course, tax season brings an entire set of responsibilities you must stay on top of—or risk facing penalties if you fall behind.

Depending on the current state of your books (as well as any surprises you might find during the data migration process), you may not have enough time or resources to manage your business tax filings, prepare and send out 1099s and W-2s to your team members, and move to a new accounting software simultaneously.

And no matter what time of year you decide to switch to FreshBooks, if you don’t dedicate enough time to the transition, you may find your business dealing with inaccurate financial data and other costly errors down the road.

3. After Tax Season

On the other hand, waiting until after tax season to make the switch to FreshBooks may help ensure that all your financials are accurate, organized, and ready to be imported into your new account. Remember, you just spent hours upon hours making sure your finances stand up to the scrutiny of the IRS.

So if you’ve just spent months in the weeds organizing everything from your expenses and invoices to your tax forms, spending a little extra time now to make the data more accessible could work wonders to improve your accounting process.

Pro: You’re Well Aware of the State of Your Financials 

When used effectively, switching to a cloud-based accounting solution like FreshBooks (and leveraging the unique features that come with it) simplifies tasks like online payments, manual data entry, time tracking, and real-time financial reporting.

These accounting features allow you to engage with your business more meaningfully, opening the door for more productive discussions with your business partners, stakeholders, advisors, and clients.

For business writer Ana Gotter, switching up her process early on allowed her to get her taxes done sooner—to the delight of her accountant. It also allowed her to consider the tax implications of her actions year-round by constantly monitoring her reports and dashboards. For Ana, the risk of saving all the heavy lifting for tax season wasn’t worth the potential penalties from the IRS.

“It’s just not something that you want to deal with,” she says, emphasizing the importance of an accounting system to track your income and expenses. “Tracking shouldn’t be left until tax season. I did it once. It was awful, and I hated it.”

Con: You’ll Need to Run (and Pay for) 2 Systems in the Meantime

One thing you’ll need to keep in mind: Because your data will essentially be housed in 2 separate accounting systems until you’ve made a complete transition, you and your accountant will need to move back and forth between the 2 during a very hectic season for your business.

It can be confusing and time-consuming—and you’ll have to pay for both platforms simultaneously until the move is finished.

Does Your Small Business Need Help With the Transition?

If you’d like assistance in migrating your accounting data from a platform like QuickBooks Online over to FreshBooks, the award-winning FreshBooks support team is just a few clicks away.

For those who want a little more support, the FreshBooks Select plan offers a suite of services designed to help make the switch as seamless as possible for a small business owner like you. Take advantage of done-for-you data migration services plus specially customized onboarding services as your dedicated account manager walks you through the process from start to finish.

FreshBooks: The Fully-Fledged Accounting Software Your Small Business Needs

Don’t fret if none of these options seem to work for you. There’s another alternative to explore. Review your calendar and look for periods where your business operations slow down enough for you to dedicate the proper amount of time and resources to the switch.

Ensure you give your business enough time (at least 1 or 2 months) for the transition. With all the valuable business data you’ll need to transfer over, this is not a process you want to rush or take lightly.

Once the process is complete, rest assured that your new FreshBooks account will help you stay on top of your business finances, make better decisions, and, ultimately, take your company to even greater heights.

This post was updated in November 2023.

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