Mastering Data Migration: Seamless Accounting Transition

This week we're going to talk about data migration. And this is one of the areas that you're gonna probably see a lot of activity on in the beginning of the year. A client may come to you and say, I'm using XYZ software, it's just not working in my firm. How do I get it into QuickBooks and ABC software? I'm gonna say, let's just stick to LeanLaw and Clio. Those are the two that I use at our firm. But there's plenty of other software out there. You might be seeing people as well that are in QuickBooks Desktop and they're moving to QuickBooks Online because they're a little bit fearful of the future and what, what lies ahead down the tracks of QuickBooks Desktop. That one's a little bit easier to manage than actually moving somebody off, let's say, for example, a CosmoLex software, an all-in-one, or maybe a software, like my case, that's an all-in-one and you're taking them out of something that's not accounting specific to be— they're all-in-one means that they have a ledger system, but you're moving them into QuickBooks. So they're not something that you're just going to start in switching from if they're in LeanLaw to Clio, a little bit simpler start and change. So they're very different migrations out there. So what is data migration? Data migration is the process of moving data between 2 different storage systems or 2 different platforms or 2 different formats. That's basically what it is. You should, if you're doing this work, get paid significantly for this, this job. This is not an easy job. It's gonna require a lot of bandwidth from you. And you know, you might need to seek out an expert, someone who's done it in the past that can help you, walk you through it, or even hire out, subcontract out to do it so that you don't have to do it. So there's plenty of reasons why you might not wanna go down this road. Mm-hmm. Although data migration, moving somebody from one platform to another can not only be beneficial, it's very beneficial for the client. I think of people that are on PC Law that are moving off of that system, which is pretty clunky and broken, and moving them to QuickBooks Online and LeanLaw or QuickBooks Online and Clio. You're going to find that the system is so much more modern for them and they're going to experience a, a bit of amazement at the fact that they're gonna be able to extract a lot more data from their accounting platform that they've never had the ability to do before. Never mind the fact that you've got a lot less clicks. So those are kind of the things you're gonna look at when you are looking at systems and, and maybe even consulting with an attorney to give them advice on what they should move to. That's a whole nother thing that you should be getting paid for. So these are ways to make more money, a different revenue stream, but also helping a client with data migration, especially if you specialize in a specific program, whether it's MyCase or Clio or LeanLaw. You're going to find that if you become that expert, you might actually get some ongoing work out of that job, because you'll be there to assist the person in the office that doesn't know the software. So what are the good steps that you need to apply when you start to work towards getting a client? So let's, for example, say that we've made the decision, you've had the conversation with the attorney and you've made the decision to move to QuickBooks and Clio, for example. They're in Cosmolex, they're in an all-in-one system and they, they just wanna get out of it. They want something a little more robust. They want the ability to store a lot of documents and, calendaring and a lot of other features that just weren't in Cosmolex. There's a couple of routes you can take. One of the things you can think about is starting fresh 2024, pulling down the balance sheet and then starting with a fresh balance sheet and just starting with a blank slate. So you're not carrying over a lot of data from the prior period. And in the case of like a PC law, that's a very clean break, a very clean system to restart. If you're starting with the method of just a fresh balance sheet. A couple of things to think about. If they have existing trust liability accounts, most clients will want you to rebuild whatever trust accounts are open. So that's going to be a factor in your pricing. And I'm not really going to touch upon pricing here. We are going to be discussing that in the Law Lab, but I think it's a great topic to discuss down the road because it's definitely something you want to get a lot more money for and you will get paid for it. Don't be afraid to put a big number on it. Mm-hmm. Because it's going to involve more than you expect. I'll just start with that. So if you're starting out with just moving things from starting with a fresh file, in that case, you're going to want to pull down that balance sheet. But the first thing you do is put a Chart of Accounts in. We have here a standard one that we use for multiple clients. It can be tweaked by practice area. I can provide a link in the article that is attached to this video so you can use my template if you'd like. But definitely you want to tweak it toward the practice area and towards the client. And I've discussed that process in the past where we kind of use a Google Sheet and pull the client's existing in and put the one that we have that we use, and then kind of put a third tab and show what you recommend, and then let the client approve it and sign off on it before you import it. You'll want them to clean up their client list to the names that they're used to having in the firm, any past clients. A lot of clients in the legal area will want to do a conflict check. So they're going to want to pull in every name that they've ever had since the beginning of time. Sometimes that can be 25, 30 years of a law firm history, which is a lot to bog down into QuickBooks. They're not going to lose that data in PC Law just because you flip the switch and in the beginning of the year they're moving to a new platform. I hesitate to have somebody come in and start a new file with 20,000 names in it for customer names. It's just going to slow down the system. It's a lot of data for the file to read. And in the example of LeanLaw, it actually does read all of that as it opens up. So that will also slow down your legal billing platform if you're using like LeanLaw or even Clio. Although I'm not seeing that as much with Clio, but you will see that. So something to consider because there's not only the client names, there might be matter names. You want to really slim down and clean up the list. The perfect opportunity to have a clean slate and start with a fresh file. Keeping the old data in the old desktop program, if that's where they're coming from, and then they can use that for their conflict check and just start new with whatever's open. When it comes to accounts receivable and accounts payable, you're looking at rebuilding and backbuilding those items as well. What we usually do with our clients is if they want all of the detail from their past invoices that are unpaid, brought in exactly as they are in the old system, meaning with all those line items. It's a higher price point than just to bring in totals. So total expenses, total income, we just kind of do a summary version. So that's an option. And you want to bring all those open invoices in because if a client's paying on invoice 5678 from 2022, you want to be able to pay that off and have the right dates and have that show as open, open accounts receivable, even if they're cash basis, open accounts receivable, and then paying that when the payment comes in, in, in the new year. So you want to have that. You're going to want to reconcile the bank account and include any open or uncleared deposits or checks that are in transit. And this is an opportunity for you to have the conversation with the client about any hanging old uncleared checks that have been hanging around since the beginning of time. They will have to be put in at this point. If you're starting a new file in the beginning of the year, you're gonna have to put them in. If they weren't addressed last year, it should be a process monthly that you're really discussing with the client whatever's hanging open. Why hasn't it cleared? Most of the time they'll tell me, "Oh, I found it on, you know, Mary Jo's desk that it never got processed. It got put in the system, it never got mailed." A lot of times the client didn't cash the check. And those are things you have to address with the proper workflow for that. And that's a whole nother video. On that process. So once you have all that in place, you're going to reconcile that bank account as of 12/31, in this case 2023, to tie it all back, include those open and outstanding items and leave them open. Do a 3-way, start with a brand new 3-way reconciliation as of 12/31 of the prior year. And that should get you going on a pretty clean route to a new file. You're gonna have that open AR, open AP. Hopefully they paid everything off and you had these discussions prior to the migration so you could have all that kind of cleaned up. And then once you get the books going with this fresh start, then you're going to come in and start to do the work. When the tax return is completed by the tax professional, you are going to go back in and tie the books to the tax return and make any tweaks there. But at least get this project started so they can start working January 1st and March 1st going forward. Okay. That's my best tips on starting a brand new file. Moving on to maybe a data migration from a QuickBooks Desktop where you're going to go in and just push the data in with an upload to QuickBooks Online file. If the file is very old, you are going to want to step the file up. So the client's in 2016 Desktop QuickBooks, you're going to need to step it up to 2019, and then you're going to have to step that up to 2022 and get it up to the current year so you're able to migrate it over to QuickBooks Online. All the data is going to be in there. So you really want that desktop file beautifully stated before you make the move. I would go through the module to kind of compress the data, go through and kind of clean the data up, make sure everything is really clean, and then inactivate any customers, any clients, any vendors that you don't need. So you're not bringing over garbage. And I didn't even get into payroll, but you're gonna need to start payroll, obviously, in the new year, and whatever program I like— QuickBooks Online payroll. You can also take Gusto if you're interested in Gusto, but that's an option for you to start the payroll new in a new year. You still have to bring in the employee names and, and have them fill out all those details because you're moving to a new system. For desktop, same thing. You're not gonna be able to do QuickBooks Desktop payroll. I guess you could, but you wouldn't do that. I would start the new QuickBooks Online file and go forward from there. That's pretty much the best practices. It's a lot of reconciliation. Once you get the data into the billing platform of choice, whether it be Clio or LeanLaw, you're gonna hand that off to the import team at either one of these companies. I like to have my clients sign off on it. So they're gonna create it. Using whatever templates provided by the client, by the billing company. I want to have my eyes on it to make sure it's correct. Look for names, sort that Excel spreadsheet by names to see if there's duplicate names that maybe had a different space or something like that where it's really not two clients, it's one. So it's a chance to clean that up. And also take a look at the data and the figures that are in there. Once the data migration has been performed, those numbers should reconcile to your totals that are on those import sheets. And then of course it'll match QuickBooks, whatever you've got into QuickBooks. I find with Clio and their importing team, you have to really push and be very noisy to get them and have you involved in the process. They like to do it with the client and kind of avoid talking to the accountant, which is not correct in my estimation. If you, Don't do that. Don't just rely on the fact that they brought over the right information, that it's correct and every piece came across. You need to validate that, validate those figures to make sure that everything comes across properly. And that's for both Clio and LeanLaw. Make sure that everything imported correctly. LeanLaw's team is very much knowledgeable in the fact that they keep you involved, keep the accountant involved, and they do validate and they do tell you what didn't come over and why. I've not experienced that with Clio, although to be honest, my business partner Sarah does handle the Clio side of those. You will have to put the opening balances in just because they brought the names in with, with Clio. You have to go back and put all the open balances in. It does not bring balances in. It brings over any work in process, but it doesn't bring over balances. Now, LeanLaw, different story. Once you've made the connection between the QuickBooks names and the LeanLaw names, it reads the data because it's a two-way sync. Okay. It's a little easier with LeanLaw, in my opinion. I have a special place for them. I think they're the best software. So Clio, fantastic software. But know those things that you need to make sure you follow up on. And then make sure that when you're coming through that everything looks good. Don't forget the follow-up, the training. If you're just doing a data migration, offer up an additional service with maybe a Slack channel to assist the bookkeeper on staff. Along the way during the transition. They do get trained in the software by both LeanLaw and Clio, but they don't get trained in the accounting side of it, the bookkeeping side of it. And that's where we can step in. And I can tell you the relief on their face when they know that it's not gonna be, okay, everything's done. You're here to run your first billing without anybody's help is just, you don't wanna leave anybody. They, they're terrified of the switch. They're having to work in one program, learn another. It's a lot on their plate. So have that compassion to go forward and do that training with them. Them, you will have a happy, happy client that might open the door for an ongoing client because you've got this amazing knowledge. And usually the person doing the bookkeeping work in these law firms, especially the bigger ones, is so overwhelmed that the assistance on part of the work is, is just— And having that expert that knows the software and that is a full working knowledge of QuickBooks and LeanLaw and Clio. Also, don't forget if there is class assigning or location tracking, don't forget to take care of those items as well. Put that on a checklist so that you have it. And I think that basically those are the things you're gonna be looking at. And I hope this is helpful. I'm open to any conversations on this on any of the social links we post this. And if you'd like more deeper conversation, please feel free to join us in the Accountants Law Lab. Until next week, bye now. Bye.