Migrating practice management system: NZ trust accounting

A practice management system migration is one of the most significant technology changes a NZ law firm will go through. The trust accounting side of that migration is also the highest-risk piece. Firms that plan it properly end up on a system their trust accountants can actually work in. Firms that don't often spend months running two systems in parallel, chasing reconciliation gaps, and dealing with problems nobody raised in the vendor demos.

Here is what actually happens and how to approach it.

Where trust accounting problems surface: after go-live

The trust accounting issues on a PMS migration do not usually appear during vendor demos or scoping conversations. They appear after the firm is live on the new system.

One issue shows up more than any other: the general ledger gap. Many cloud PMS solutions handle trust accounting but not the firm's general ledger. The general ledger (income, expenses, GST, payroll) typically moves to Xero or MYOB as a separate step. If this is not planned upfront, firms hit go-live with trust accounting running on the new system and nowhere for the general ledger yet. The old PMS stays live in parallel while that migration catches up. Avoidable with better scoping, but it happens regularly.

The second problem is harder to spot before you are live. A new system can meet every NZ regulatory requirement and still be significantly worse to work in than what your trust accounting team had before. Data entry is not structured around NZ reportable periods. The reports they need — TAS certificates, three-way reconciliation — are not surfaced intuitively. What used to take a trust account supervisor an hour at month-end now takes half a day. Compliant, yes. But the workflow is broken.

The vendor pitch that misleads firms

When vendors tell you their system meets NZ regulations for trust accounting, they are usually telling the truth in a narrow sense. The required outputs exist. But what they typically do not tell you is that the user interface was not built around NZ trust accounting workflows.

In many international or Australian-origin systems adapted for NZ, the NZ-specific trust accounting reports are bolted on rather than native. They live in a different part of the application, they require a different sequence of steps to generate, and they are not designed around how a NZ trust account supervisor thinks about their work. The compliance box is ticked. The experience is cumbersome.

That gap between ticking the compliance box and being genuinely built for NZ trust accounting is worth probing in every demo before you commit.

Timing the migration to reduce risk

Timing matters more than most firms realise. The end of the financial year is the wrong time to migrate. Your trust accounting team will be under pressure, error tolerance is lower, and the stakes of something going wrong are higher. Pick a period that gives them breathing room on both sides of the migration date.

Who runs the migration matters just as much. PMS vendors typically manage the trust accounting migration themselves, but the quality of that process varies significantly. Ask for NZ reference firms that have completed the migration recently, speak to their trust account supervisors specifically, and ask what went wrong as well as what went right. A vendor with a clean record is worth paying attention to. One who cannot provide references is a risk.

Trust accounting needs full functionality from day one

There is sometimes a temptation to treat the first few weeks on a new system as a settling-in period, accepting reduced functionality while the team learns the new tool. Do not accept this for trust accounting.

Trust accounting has hard deadlines: TAS certificates by the 10th working day of the following month, three-way reconciliation completed and signed off, IBD records maintained correctly. These do not pause while your firm adjusts. Insist on full trust accounting functionality before go-live. If the vendor cannot guarantee this, that is a scoping and timeline problem to resolve before you migrate, not after.

A guide for trust account supervisors

If you are the trust account supervisor at your firm and your managing partner is talking about a PMS migration, here is what you need to be involved in.

The general ledger migration is a separate project, and someone needs to own it. PMS vendors handle the trust accounting migration. What they do not always make clear is that migrating the general ledger to Xero or MYOB is a different piece of work that sits alongside the PMS migration. If this is not planned in parallel, you will end up with a gap. Ask directly: where does the general ledger go, who is running that migration, and what is the timeline? For more on how the general ledger and trust accounting fit together in a cloud environment, our guide to Xero and NZ trust accounting covers the right structure.

Push on the day-to-day impact for your team specifically. Vendor demos are typically run by sales people showing the system at its best. Ask them to walk through what your trust accounting team's actual day looks like on the new system: how a client receipt is processed, how a disbursement is recorded, how month-end reconciliation works, and how the TAS certificate is generated. Ask them to show you this in NZ-specific terms with NZ-specific figures. If they cannot, that tells you something important about how native the trust accounting experience actually is.

Getting independent advice

Valley IT works with NZ law firms on technology transitions, including practice management system migrations.

To talk through your situation, book a free 30-minute consultation or call 0800 824 848.