Conversion balances

Conversion balances are the closing balances of your accounts or bank accounts on the last business day before you start using Xero. They form the opening balances of your accounts in Xero.

Before you start entering conversion balances

  1. Decide if you want to enter all your conversion balances now.
  2. Choose a method for entering your conversion balances.

Image showing conversion balances

Decide if you want to enter all your conversion balances now

  • Account balances are the first step towards preparing your reports in Xero. Your reports won't be accurate until you've entered your account balances. However, you can start using Xero without entering any account balances.
  • You only need to enter balances for accounts that have them. If your business has just started trading, your conversion balances are likely to all be zero and you won't need to enter any. Or, you may have just a bank balance and owners' equity balance to enter.
  • When you set up Xero, you may want to enter balances for just some accounts - many people start by entering just their bank account balance. This means they can start reconciling their bank account soon after switching to Xero.
  • You or your accountant can go back and finish entering account balances at any time.

Choose a method for entering your conversion balances

When you're ready to enter all your conversion balances, choose from 3 methods:

  • Method 1: Manually enter your conversion balances
  • This is a good method if you don't mind doing data entry. It's also a good method if you don't want to enter every account (in your chart of accounts) from your old accounting system.

    How to manually enter your conversion balances

  • Method 2: Import your conversion balances
  • This is a good method if you're experienced with importing files or if you have a lengthy chart of accounts. You cannot import just your conversion balances - instead you need to add your conversion balances to a chart of accounts import file.

    Import a chart of accounts

    Before you import your chart of accounts, it's a good idea to review the accounts in your old system and remove any unused ones.
  • Method 3: Use a Xero conversion specialist
  • This is a good method if you would like to transfer historical transaction data from your current accounting application to Xero. Either:

    • contact your accountant or bookkeeper, or
    • go to our App marketplace and choose a conversion specialist.
    • If you choose this method, you don't need to continue with the steps on this page - your conversion specialist will finish entering your conversion balances.

Enter your conversion balances

Follow these instructions if you're manually entering or adjusting conversion balances.

You will need a copy of your previous accounting system's trial balance for the day before your conversion date. (For example, if your conversion date is January, use your trial balance that is dated 31 December.) Learn more tips for entering conversion balances.

  1. In the Settings menu, select General Settings.
  2. Click Conversion Balances.
  3. Click Show all accounts.
  4. Enter balances from your previous accounting system's trial balance into the debit and credit fields.

    Image showing Debit and Credit columns

  5. Click Save.
  6. Enter any outstanding invoices and bills and credit notes.
  7. Enter any outstanding overpayments and prepayments that relate to payments made or received prior to conversion.
  8. Use spend or receive money transactions, by selecting the overpayment or prepayment option. These transactions should be dated with a pre-conversion date. Once entered, they can be reconciled using the mark as reconciled option. The total values for overpayments and prepayments should be included with your conversion balances.
  9. Enter any unpaid expense claims dated prior to conversion. You'll need to include the total of these claims in the conversion balance screen under the account code for unpaid expense claims.
  10. (Optional) You may now want to enter comparative balances.
The unpaid bills and invoices that make up the accounts payable and accounts receivable opening balances need to be entered before you can save your conversion balances. You can run a Trial Balance after saving your conversion balances as a check that they are correct.