Tips for entering conversion balances
Here's some guidance and tips for entering account balances. You'll also find tips for some specific accounts which you need to set up correctly so Xero can create accurate reports for your organisation.
- Always enter positive numbers
- Your total debits and total credits should match
- Add new accounts if you need to
- Xero helps you convert foreign currency balances
Enter debits in the Debit column as positive numbers. Enter credits in the Credit column as positive numbers.
If the trial balance from your previous accounting system has negative numbers, enter these in the Credit column as positive numbers.
When you've finished entering your account balances, your total debits and total credits should match. However, if they don't, Xero records an adjustment which you or your accountant can correct later.
Click Add a new line, then +Add new account if you need to add a new account to your chart of accounts.
Xero helps you convert your foreign currency bank balances and your foreign currency Accounts Payable and Accounts Receivable balances.
Click into the account balance in the debit or credit column and click Edit as Multi-currency Balance.
Enter all your other balances in your base currency.
Tips for specific accounts
- For your bank and credit card accounts, enter balances from your bank statements
- Your Accounts Payable balance needs to equal total outstanding bills
- Your Accounts Receivable balance needs to equal total outstanding sales invoices
- If you want to use tracked inventory
- Accounts Receivable and Accounts Payable balances and tracked inventory
- Combine your Sales Tax accounts
If you have reconciling bank items such as uncleared cheques, enter a separate balance for these.
Enter positive balances for bank accounts as debits, and negative (overdrawn, loan, or credit card) balances as credits.
If you have other amounts included in your Accounts Payable balance, enter these as a separate balance.
If you don't have all your outstanding bills ready to enter now, leave your Accounts Payable balance at zero. You or your accountant can come back to it later.
If you have many outstanding bills you may want to import them. This will save you data entry time. Leave your Accounts Payable balance at zero and import your bills into Xero.
If you have other amounts included in your Accounts Receivable balance, enter these as a separate balance.
If you don't have all your outstanding sales invoices ready to enter now, leave your Accounts Receivable balance at zero. You or your accountant can come back to it later.
If you have many outstanding sales invoices you may want to import them. This will save you data entry time. Leave your Accounts Receivable balance at zero and import your sales invoices into Xero.
Set your inventory account balance to equal the value of inventory items you want to track.
Enter your inventory account balance, but don't use tracked inventory items in the invoices and bills you enter to support your Accounts Receivable and Accounts Payable balances.
Afterwards, you can import your inventory items and enter inventory opening balances. This avoids double-counting.
Xero uses just one Sales Tax account. If you have more than one Sales Tax account you will need to combine them. That is, add together your Sales Tax balances.
Tips for foreign currency accounts
- Add balances for foreign currency bank accounts
- Enter Accounts Payable and Accounts Receivable balances for foreign currencies
- Enter one rate per currency as at the conversion date
If you've added foreign currency bank accounts in Xero, add the account balances by clicking in either the Debit or Credit column.
The XE.com exchange rate for that currency as at your conversion date is provided by default. It converts the foreign currency balance in to your base currency.
If the converted balance doesn't match your calculation of the balance to your base currency as at the conversion date, you can edit the exchange rate. Click in the Exchange Rate box and enter the rate you used on your Trial Balance or other method of calculating your balance at your conversion date.
Accounts Payable and Accounts Receivable balances can be entered in your base currency, a foreign currency, or a mix of both. To enter a foreign currency balance, click into the Accounts Payable or Accounts Receivable field, then click Edit as Multi-currency Balance.
Only the currencies you've added will display - use some or all as required. Enter the total amount of outstanding sales invoices or bills you have in each currency on your conversion date. The balance can be positive or negative representing outstanding sales invoices, bills or credit notes respectively.
If the converted base currency amounts don't match your calculation of outstanding invoices and bills in your base currency, you'll need to edit the exchange rate. Click in the Exchange Rate box and enter the rate you used on your Trial Balance or other method of calculating your balance at your conversion date.
When you save your balances, you'll need to add the unpaid sales invoices, bills or credit notes (or unpaid portions) in each currency to make up the balances in each currency.
Click on the + icon to expand each currency, then enter the required sales invoices, bills and credit notes to make up the balance in that currency.
You can only enter one exchange rate per currency. For example if you have several bank accounts using the same foreign currency, each bank account would use the same exchange rate at conversion.