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.

General tips

  • Always enter positive numbers
  • 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.

  • Your total debits and total credits should match
  • When you've finished entering your account balances, your total debits and total credits should match. However, if they don't, Xero records a historical adjustment conversion journal to your opening balances. If you have outstanding multi-currency invoices or bills, as at conversion date, this may also cause a historical adjustment to be posted, due to unrealised gains or losses.

    To remove the historical adjustment, update your balances, so that the total debits and credits match. You may also need to include any unrealised currency gains or losses, as at your conversion date. Check in with your accountant if you need help correcting balances.
  • Add new accounts if you need to
  • Click Add a new line, then +Add new account if you need to add a new account to your chart of accounts.

    Add an account to your chart of accounts

  • Xero helps you convert foreign currency balances
  • 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.

    Image showing Edit as Multi-Currency Balance link.

    Enter all your other balances in your base currency.

Tips for specific accounts

Tips for foreign currency accounts

  • Add balances for foreign currency bank accounts
  • If you've added foreign currency bank accounts in Xero, add the account balances by clicking in either the Debit or Credit column.

    Image showing the conversion balances screen, with a link to edit the balance in a foreign currency bank account.

    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.

    Image showing the edit exchange rate window in the conversion balances screen.

  • Enter Accounts Payable and Accounts Receivable balances for foreign currencies
  • 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.

    Image showing Edit as Multi-Currency Balance link.

    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.

    Image showing the screen to edit foreign currency exchange rates.

    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.

    Historical invoices

    Conversion balances: invoices and bills

  • Enter one rate per currency as at the conversion date
  • 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.

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