Moving from Sage Pastel to cloud accounting

Pastel is the accounting package that many South African bookkeepers learned on. Its newer form, Sage 50cloud Pastel, is described by Sage as desktop accounting with cloud access. A business that moves to a fully cloud product such as Sage Accounting, Xero, QuickBooks Online or Zoho Books gets access from anywhere, a monthly price in place of a licence and an accountant who can log in. It also takes on a project.

First decide if you should move

• Do you or your accountant need access from more than one place?
• Do you want bank feeds, so that reconciliation stops being typing?
• Do you need more users than your Pastel licence allows?
• Can your connection and your power cope with a cloud product? Read load shedding and business software.
• Is Pastel doing the job? A product that works and that your bookkeeper knows well is not a problem to solve.

Pick the date of the changeover

Move at the start of a financial period, ideally the first day of a VAT period, so that each return comes entirely from one system. The first day of the month is easiest, and the start of your financial year is cleanest if you can wait for it. Avoid moving in the last month before a VAT return or a year end.

The steps

1. Close the last period in Pastel completely: post everything, reconcile the bank, and run and submit the VAT201 for that period.
2. Print or save a trial balance as at the changeover date. It is the number that the new system's opening balances must match.
3. Export your customers and suppliers with their balances, aged by invoice if you can. Check the totals against the ledger controls.
4. Export stock on hand and values, and your fixed asset register, if you hold them in the system.
5. Set up the new product: your company details, VAT number, VAT basis and period, financial year end and chart of accounts. Map each Pastel account to a new one.
6. Enter the opening balances and check that the trial balance agrees with the one you saved.
7. Connect your bank, import transactions from the changeover date and reconcile. See bank feeds, bank by bank.
8. Run the old and the new system side by side for one month, and compare the VAT and the bank balance at month end.
9. Raise your first invoices and check that they meet the law. See what a valid tax invoice needs.

Keep the old data

SARS expects you to keep your financial records for five years. That includes the years that sit in Pastel. Take a full backup of the company data, save the main reports as PDFs and keep both somewhere safe and off the old computer. Do not uninstall Pastel or throw away the machine until your accountant agrees that you no longer need to open the data.

What changes day to day

• You pay a monthly or yearly price instead of a licence. Price it on the same footing as your old costs, with VAT shown, using including and excluding VAT.
• Updates arrive without you installing them, and so do changes to the screens.
• More than one person can work in the books at the same time, so permissions matter.
• You depend on a connection. Plan for the days it fails.

A four week plan

Mistakes to avoid

• Changing over in the middle of a VAT period, so that a return needs figures from two systems.
• Importing everything, including years of old transactions you will never use, instead of balances and a clean start.
• Forgetting the stock count, so that inventory values start wrong.
• Not telling your bank, your accountant and your auditor which system is now the record.

Ask each vendor what it can import

Every product has its own import tools and its own limits. Ask each one in writing what it can bring across from Pastel, which parts you have to enter by hand and whether it offers help for the changeover. Then test the import with a copy of your data in the trial, not on the day you switch. See how to test software in a free trial and choosing accounting software in South Africa.