The shift from desktop accounting software to cloud platforms has been one of the defining transitions in Australian bookkeeping over the past decade. Many practices still have clients on MYOB AccountRight desktop or older Reckon/QuickBooks installations, and the migration conversation comes up regularly.
Done well, a cloud migration delivers real efficiency gains for both the client and the practice. Done poorly, it creates months of reconciliation headaches and data integrity problems.
Why migrate?
The practical benefits of cloud accounting for Australian SMEs:
- Real-time bank feeds via direct feeds from major Australian banks
- Multi-user access for bookkeeper, client, and accountant simultaneously
- Automatic updates — the software is always on the current version
- Integration ecosystem — payroll, inventory, invoicing, and AP automation tools connect via API
- Anywhere access — the client can approve invoices from their phone
The argument against migration is usually cost or familiarity. For clients with complex custom MYOB configurations or who have been on the same software for 20+ years, there can be genuine resistance.
Choosing the target platform
The two dominant cloud platforms in Australia are Xero and MYOB Business (cloud). For clients already on MYOB desktop, MYOB Business is often the path of least resistance — same vendor, familiar interface, and MYOB provides a migration tool.
For clients migrating to Xero, the migration is more involved but the outcome is a platform with a deeper integration ecosystem and arguably a better user experience for most SME types.
The migration approach: conversion vs. start fresh
Full data conversion — migrates historical transactions, customer/supplier records, chart of accounts, and opening balances from the old platform. More work to execute, but preserves history in the live system.
Start fresh with opening balances — the most common approach for established businesses. The old system is maintained in read-only mode for historical reference, and the new system starts with balances as at a chosen date (typically 1 July or 1 January). Simpler, faster, and avoids carrying over historical data errors.
For most clients, the start-fresh approach is recommended. Historical data is accessible in the old system; the new system starts clean.
Pre-migration checklist
Before the cutover date:
- Reconcile all bank accounts, debtors, creditors, and payroll in the old system
- Run a trial balance and aged debtor/creditor reports as at the cutover date
- Export the chart of accounts, customer list, and supplier list
- Note any customised tax codes, payroll categories, or report configurations that need to be recreated
- Back up the old system data file
Setting up the new system
Chart of accounts: Build or import the chart of accounts. In Xero, the chart of accounts can be imported via CSV. Take the opportunity to rationalise accounts — migrations are a good time to clean up codes that have accumulated over the years.
Opening balances: Enter the trial balance as at the cutover date as the opening balances. The retained earnings figure should equal the sum of all opening balance equity entries.
Bank accounts and feeds: Set up each bank account and connect bank feeds. For major Australian banks (CBA, NAB, ANZ, Westpac), direct bank feeds typically activate within 1–3 business days.
Tax codes: Verify GST codes map correctly. The ATO tax codes (GST, FRE, INP, N-T, CAP) should be present in the standard chart.
Payroll setup: Payroll is typically the most complex element of any migration. Employee records, leave balances, YTD figures for STP, and pay rate configurations all need to be recreated. For a mid-year migration, YTD earnings need to be entered as opening balances to ensure STP reporting is accurate for the full year.
The first month post-migration
The first month requires closer-than-usual attention:
- Reconcile bank accounts weekly rather than monthly
- Compare the new system P&L to the old system for the same period (if there is overlap)
- Check that all recurring transactions (standing orders, auto-payments) have been re-established
- Verify that BAS coding is working correctly before the first quarterly lodgement
The majority of migration issues surface in the first reconciliation. Having the old system available for comparison during this period is important.
Common problems
Duplicate transactions: If bank feeds are connected too early and then transactions are also entered manually, duplicates appear. Establish a clear protocol: bank transactions come from the feed only, not manual entry.
Opening balance errors: An unbalanced trial balance entered as opening balances creates a suspense entry that can take months to find. Double-check that debits equal credits at cutover.
Payroll YTD errors: STP submissions with incorrect YTD figures create problems at payment summary time. Verify YTD figures against the old system payroll summary before the first STP submission.
Retained earnings discrepancy: If the business has inter-entity transactions, related party loans, or complex historical adjustments, the retained earnings at cutover may not match the expectation. Investigate before closing the old system.