Moving Wholesale Business from Sage to Xero? Read This First

Jun 28, 2019 | Cloud Accounting, Inventory Apps, Wholesale

Part 2. Moving Your Wholesale Business from Sage to Xero? Get the Answers to These Questions First

In our last blog, we talked about the limits of Xero without add-ons for wholesale businesses moving over from Sage.

In case you missed out, here’s a quick recap:

A wholesale business with a turnover above £1 million is highly likely to need an inventory app to get the most out of Xero – depending on whether they can fit inside the limits.

So if you’ve decided that you need an inventory app to go along with your move from Sage to Xero, you’re ready to start thinking about the next steps.

And that begins with choosing the right add-on:

Choosing an inventory app

If your wholesale business can’t fit inside the restrictions we talked about last week, you’ll need to start looking for the best inventory app for your business.

And the easiest way to get a solid understanding of the best options is by talking to a specialist.

You can get a free consultation with us right here.

In this free call, we’ll find out a bit about your business and what you need, and we’ll talk you through your options to help you choose the best inventory app for your specific business.

Here are some of the questions we usually ask to quickly get to the root of your situation:

1. How many different products do you sell?

Or in other words: how many product codes will you need? Some systems have limits on the number of products you can upload.

2. How does your pricing work for your customers?

Do you have:

  • Fixed price tiers?
  • Different prices for different customers?
  • Quantity-based discounts?
  • Or minimum order requirements?

3. Do you sell online – and which platforms do you use?

Do you sell through an e-commerce platform that integrates with Xero?

Do you use a dedicated B2B portal?

What’s the proportion of your sales that comes through these online platforms?

4. Are most of your sales paid upfront or on payment terms?

An inventory app can help you avoid the limits of Xero by consolidating groups of invoices and purchase orders into one transaction.

But this consolidation can only happen for transactions that have been paid in full – which means the way your customers pay you can make a huge difference to how you fit into those limits on Xero.

A wholesale business that takes all of its payments upfront at the time of the sale will find it easy to consolidate its transactions so they fit into the limits of Xero. But for a business that has a mix of upfront payments and invoices with payment terms, staying under the limits might be a little more complicated.

So what happens if an add-on doesn’t help me fit inside the Xero limits?

If your wholesale business has too many transactions to squeeze into Xero – or it’s not possible to use an add-on to fit inside the limits – you might need to take a look at a completely different accounting system.

A product like Accounts IQ – which is a totally separate alternative to Xero – is a fully customisable accounting software package that comes with no limits on your transactions.

But it also comes with much higher costs. While Xero usually starts at around £22.50 per month, a move over to Accounts IQ could cost in the region of £700 per month.

So this should really only be an option for wholesale businesses with a high revenue that simply can’t consolidate all of their transactions into the monthly limits for Xero.

Now that you’ve got a good understanding of what you need to know before you choose an inventory app, we can start to look at a few of the crucial steps you’ll need to take before and after making the move over to Xero.

Training your users

If we could only say one thing about training to the businesses we speak to, it would be this:

Your users need to be fully trained before the system goes live.

When businesses try to implement a new system by themselves (without the help of consultants like us), they underestimate how important this pre-launch training is.

They think their users can just learn as they go: work through a little trial and error and figure things out once they get more comfortable.

But this is a mistake.

Errors quickly start to stack up. Once they start to realise their mistakes, they’ll have to spend time going back into their historic transactions to correct them. And this extra time spent moving backwards makes it even harder to stay up to date with their current and future transactions.

So once you’ve chosen the best system for your wholesale business, the main focus of your time and resources should always be on getting your people trained and ready to use it correctly as early as possible.

Performing a stock count before you move

This is another important step that businesses often forget:

Before you move to a new accounting system, complete a fresh stock take so you can start from a clean slate.

Without it, you’ll have to start making adjustments in your new system further down the line – which is an unnecessary extra hassle that you can easily avoid by keeping your stock data as recent as possible before you make the move.

Checking your data in the first few weeks and months

Most businesses will go live with a new system at the start of the financial quarter.

And unfortunately, lots of businesses won’t think to perform checks on their new system until it’s time to report their VAT for that quarter.

In most cases, this is far too late to have time to fix any issues.

So instead, we recommend weekly and monthly checks in the first period after moving over to a new accounting system.

That means checking that:

  • Your invoices and purchases are pulling over into the accounting system correctly
  • Your customer details are still correct
  • Your line items are still correct
  • And most important: checking that your chart of accounts mapping is correct.

By taking the time to check over your new system at an early stage, you’ll be able to avoid the stress of rushing to fix a huge number of errors in time for your VAT return.

(And you’ll also reduce the risk of sending off a VAT report full of errors!)

So what’s the next step?

By now, you should have a solid understanding of the most important stages of moving your wholesale business over from Sage to Xero.

It might sound like a lot to take in – but that’s normal.

So if you still have questions (or you’re not sure if you’re making the right choices), you can take advantage of one of our free consultations to get the answers you need.

We’ll talk you through all of the important information and questions, and we’ll give you the unbiased recommendations you need to make the best choices for your wholesale business.

So click here to book a call and get the advice you need – we’re always happy to talk shop with a wholesale business that cares about its future.


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