How much bank history to move to new software depends on what you will report on. Most small businesses move the current year: balances at the start of the tax year, then every bank line since. Balances alone is the least work. Moving everything is rarely worth it, because old years can stay readable in the old program.
Three amounts of bank history to move to new software
There are three realistic choices. Move balances only, as of the switch date. Move the current year, from the first day of the tax year. Or move every year the old program holds. Each step up adds statements to import and months to reconcile, and buys more reporting inside the new program.
The choices side by side
The import counts below are examples for one business with two bank accounts and one card, switching on July 1.
| Choice | Files to import (example) | Checks to run | What the new software can report |
|---|---|---|---|
| Balances only | 0 | Three opening balances against statements | From July 1 onward |
| Current year | 18 (six months for three accounts) | 18 month-end balances, 18 reconciliations | The whole tax year |
| Everything, five years | 180 | 180 month-end balances | Every year in one place |
The jump from the current year to everything is ten times the work in this example, for reports that the old program can still produce.
What does a balances-only bank history move cost and save?
A balances-only move costs almost nothing in import work: you enter each account's statement balance on the switch date and start fresh. What it gives up is a single program for the year. Year-end reports then need figures from both the old and new software, added together.
When it is enough
- You switch on the first day of the tax year, so there is no split year at all.
- An accountant prepares your year-end from their own records, not from your reports.
- The old program will stay readable for as long as you need it.
The setup step
Each balance must come from the bank statement, not from the old program's register, which may hold uncleared items. For a Xero switch, the post on opening balances when switching to Xero shows where each figure goes.
Moving the current year of bank history after a mid-year switch
The current year is the usual choice for a mid-year switch, because it puts every month of the tax year in the new program. You enter balances as of the last day of the previous year, then bring in each month's bank lines up to the switch date, and reconcile each month as you go.
Where the lines come from
A new bank feed may cover some of it. Intuit's article on connecting bank and credit card accounts to QuickBooks says download timespans vary by bank, from 90 days up to 24 months. For the months a feed cannot reach, you import statement files.
A common case
People moving from QuickBooks Self-Employed often take this route, because Self-Employed tracks tax categories rather than a full set of books. Moving from QuickBooks Self-Employed to QuickBooks Online walks through it.
Older months often exist only as PDF statements. SimpleBankConvert is being built to turn those into import-ready CSV or QBO files; the home page shows an example.
Moving every year of bank history: when the import work pays off
Moving everything pays off only when someone needs multi-year reports from the new program itself, such as a lender asking for several years of reconciled books, or a sale of the business. Otherwise, the old years are better kept as saved reports and a readable backup of the old program.
The hidden cost
Old bank history rarely imports cleanly. Banks change statement layouts, accounts close, and old export files fail on modern software. Old IIF files are a frequent example; the post on the IIF import error in QuickBooks Desktop shows what goes wrong. Budget time for each year, not just each file.
A middle path
If one report needs older figures, such as three years of profit for a loan application, you can enter one summary journal entry per old year instead of every bank line. The new software then shows yearly totals for those years, and the detail stays in the old program. Ask whoever wants the report whether totals will do before you import five years of lines.
Does the IRS expect old bank history inside the new software?
No. The IRS asks you to keep records that support your tax returns, not to keep them in any particular program. Bank statements, saved reports and a backup of the old software all count as records, so record-keeping rules alone are not a reason to move more history.
How long the records last
The IRS page on how long to keep records says that generally you keep records supporting income, deductions or credits until the period of limitations for that return runs out. It gives three years as the usual period, six years if you leave out more than 25% of gross income, and at least four years for employment tax records.
What matters is that you can find the statement for any month in that window. A folder of PDF statements named by account and month meets that need without a single import.