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.

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

Here is a worked example for XYZ Inc that's converting to Xero at January 1, 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:

Appleville
Sales 1,000
Rent600 
Bank400 
Orangetown
Sales 1,700
Rent900 
Bank800 

Follow these steps:

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

    Enter conversion balances

    Image showing conversion balance entry screen.

  2. Go to Settings > General Settings > Tracking. Add your relevant tracking categories.

    Image showing tracking categories and options.

    Set up tracking categories to monitor different areas of your business

  3. Create a manual journal dated the day before conversion date, in this case December 31, 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. Enter comparative balances in Settings > General Settings > Conversion Balances > Comparative Balances, if you need to. You can't apply tracking to these comparatives.