Add tracking to your conversion balances

Although Xero doesn’t offer tracking on conversion balances, you can use manual journals to achieve the same effect.

Some balance sheet accounts in Xero cannot have manual journal entries to them, for example: bank accounts, GST, accounts receivable and payable – so these will be excluded from the tracking reports.

Here is a worked example for XYZ Pty Ltd that's converting to Xero at 1 January 2013. It has 2 branches (Appleville and Orangetown) to be set up as tracking categories.

Appleville and Orangetown's trial balances as at the end of the current financial year look like this:

Image showing branch opening balances.

Follow these steps:

  1. Enter the combined conversion balances into the conversion balance screen. You can enter these while you're setting up your organisation in Xero or after.

    When creating journals to assign tracking, the balances you enter should not include any amounts already entered as outstanding invoices or bills that include tracking as at conversion date.

    Image showing the combined conversion balances in the conversion balance screen.

  2. In the Settings menu, select General Settings, Tracking, then add your relevant tracking categories.

    Image showing tracking categories and options.

  3. Create a manual journal dated the day before conversion date, in this case 31 December 2012. The effect of this journal is to reverse the conversion balances, then repost them including tracking splits.

    Image showing journal for conversion balances with tracking.

  4. (Optional) Enter comparative balances. You can't apply tracking to these comparatives.

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