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- March
What Is Cut-off? Why You Must Cut-off at Fiscal Year Start for ERP Go-Live
In an ERP implementation project, "Cut-off" is a critical term that every team must understand. It marks the pivotal moment when the organization officially switches from the old system to the new ERP. This article explains the definition, steps, and real case studies.
Quick Summary: Cut-off means stopping the old system entirely and switching to the new ERP system on a designated date. Most organizations choose October 1 (the start of the Thai fiscal year) so that the Opening Balance in the new system starts from the verified closing balance of the old system.
What Is Cut-off?
Cut-off is the point at which an organization stops using the old system (e.g., Excel, Access, or legacy systems like Dynamics AX) and begins recording all data exclusively in the new ERP system from a designated date onward. Transactions before the Cut-off date remain in the old system, while all transactions from the Cut-off date forward are recorded only in the new system.
Why Cut-off at the Start of the Fiscal Year?
For Thai government agencies and public organizations, the fiscal year begins on October 1. Choosing to Cut-off at the fiscal year start offers several advantages:
- Clear Opening Balance — The closing balance from the old system at fiscal year-end becomes the Opening Balance for the new system
- New Year Budget — The new year's budget can be set up in the ERP system from day one, enabling immediate budget control
- No Mid-year Transaction Migration — No need to transfer accounting entries mid-year, which is complex and error-prone
- Complete Period Close — All reports for the entire fiscal year come from a single system, eliminating the need to combine data from two systems
5 Steps of ERP Cut-off
| Step | Name | Details |
|---|---|---|
| 1 | Close Old System Period | Complete the fiscal year-end close in the old system. Verify all account balances, perform Bank Reconciliation, and confirm fixed asset values. |
| 2 | Prepare Opening Balance | Extract carry-forward balances from the old system: accounts payable, accounts receivable, inventory, fixed assets, bank deposits, and new year budget. |
| 3 | Import Opening Balance | Import the carry-forward balances into the new ERP system. Verify that total debits equal total credits and that each account balance matches the old system. |
| 4 | Verify and Confirm | Reconcile every line item between the old and new systems. Any discrepancies must be resolved before going live. |
| 5 | Go-Live on October 1 | Officially launch the new ERP system. Revoke data entry permissions in the old system. All transactions from this date forward are recorded exclusively in the new system. |
Comparison: Cut-off vs Parallel Run vs Phased
There are three main approaches to switching ERP systems, each suited to different situations:
| Aspect | Cut-off (Immediate Switch) | Parallel Run (Dual Systems) | Phased (Gradual Rollout) |
|---|---|---|---|
| Method | Stop old system immediately, start new system 100% | Run both old and new systems simultaneously for 1-3 months | Open one module at a time, e.g., accounting first, then inventory |
| Duration | Shortest — one day | Long — 1-3 months | Long — 3-12 months |
| Workload | Normal — work on one system | Very high — must enter data in two systems | Moderate — but cross-module data may not align |
| Risk | High if not well-prepared | Low — old system serves as backup | Moderate — cross-module data may not match |
| Best For | Organizations that have completed UAT with a ready team | Organizations requiring high confidence | Large, complex organizations |
Case Studies: BEDO and TMF Successfully Used Cut-off
Examples of organizations that successfully cut-off on October 1 (fiscal year start):
- BEDO (Biodiversity-Based Economy Development Office) — Cut-off from their legacy system to Saeree ERP on October 1. The team prepared the Opening Balance two weeks in advance. Users began recording transactions in the new system from the first day of the fiscal year.
- TMF (Thai Media Fund) — Switched from Microsoft Dynamics AX to Saeree ERP using the Cut-off approach on October 1. The implementation team migrated Master Data and Opening Balance in advance, then launched the new system on schedule.
Both organizations chose the Cut-off approach because they had completed thorough UAT, had Master Data ready, and their users were fully trained — enabling a smooth transition.
Related Articles
- What Is Data Migration? Implementation
- Essential ERP Terms — 20 Key Terms End User
- How to Start When Your Organization Wants ERP Article
- Switching from Dynamics AX to Saeree ERP Article
