Account balances

Account 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 your account balances

Enter your account balances

Image showing conversion balances

Decide if you want to enter all your account balances now

If you have recently converted your data from QuickBooks to Xero, avoid changing your conversion balances now. Your balances should be correct as part of the conversion process from QuickBooks to Xero.
  • 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' 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 account balances

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

If you choose method 3, you don't need to continue with the steps on this page - your conversion specialist will finish entering your account balances.

How to enter your account balances

Follow these instructions if you're manually entering or adjusting account 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 December 31.)

How to choose a conversion date

  1. Click Show all accounts.
  2. Enter balances from your previous accounting system's trial balance into the debit and credit fields.

    Tips for entering account balances

    Image showing Debit and Credit columns

  3. Click Next.
  4. Enter any invoices, bills and any credit notes that were unpaid in your previous system (if you have any).

    Conversion balances: invoices and bills

    Image showing unpaid invoices screen

Tips for entering account balances

This section provides general guidance and tips for entering account balances. It also provides tips for some specific accounts which you need to set up correctly so Xero can create accurate reports for your organization.

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 an adjustment which you or your accountant can correct later.

  • 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.