This follows from Part 1 - Beginner’s Guide to User Xero Accounting: Getting Started.
This section will be useful to you if your business is already running and you’ve managed your financials with others systems (paper records, spreadsheets, another accounting program like MYOB) and you now want to start using Xero. However, if you’re using Xero from scratch - checkout out Part 2A - Setting up from Scratch.
DIY Conversion is doable, even if you’re not an accountant/IT person. It just gets a bit fiddly and you’ll need some patience. But remember, you’ll only have to do it once (unless converting to another software again!)
So here’s how to go about converting to Xero from your previous accounting system.
Choose a conversion date.
Go to Step 2A - Starting from Scratch and complete:
- Steps 1 - 6 in Getting Access to Xero
- Steps 1 - 4 in Setting up your Business Details in Xero
- Steps 1 - 10 in Setting up your bank account
- Steps 1 - 4 in Tax Rates
Depending on what system you’re using, collect the following information (you may have all, some of none of this information with you) that happened before conversion date from your current financial record management system:
- Contact list
- Chart of Accounts
- The debits and credits (ins and outs) of money that has gone through your bank account
- Any manual journals
- Details of any fixed assets + depreciation you may have
Set up a folder called:“conversion” in your computer. You’ll use this to store all your conversion files and there will be many. Essentially what you’ll be doing overall is downloading Xero conversion templates, putting in your information and then uploading to Xero. You’ll need somewhere to store these files - do it in this folder.
Download the Xero templates & save them into your newly created folder. These are templates that you can use to upload transactions/data that you already have and upload it in bulk. The files are almost always CSV files (CSV is just an easily readable excel file). Here are the available templates for downloading and where to find them - remember only get the templates that you need.
Chart of Accounts - Settings > Chart of Accounts > Import > then choose “Chart of Accounts CSV file for a GST registered company” or “Chart of Accounts CSV file for a Non-GST registered company”
Contacts - Contacts > All Contacts > Import > Click “Download Template file”
Bank Statement - Accounts > Bank Accounts > Select the bank account you wish to import data for and click “Manage Account” button > Import a Statement > and then click “Download our CSV template”
Inventory - items - Accounts > Inventory > Import > Click “Items” > Click "Download Template file. This will allow you to upload details of all your available inventory/stock lines.
Inventory - Opening Balance - Accounts > Inventory > Import > Click “Opening Balances” > and then click “Download existing opening balances”. This will allow you to upload details of all your available inventory/stock lines that you have on hand at your conversion date.
Sales - Accounts > Sales > Import > Click “Download Template File”
Purchases - Accounts > Purchases > Import > Click “Download Template File”
Manual Journals - Adviser > Manual Journals > Import > Click “Download Template File”
Fixed Assets - Accounts > Fixed Assets > Import > Click “Download template”
Now here’s the fiddly part and the part which takes the longest - for each of the templates that you’ve downloaded. Go through each one and copy and paste your data into it following the headings and any instructions provided by Xero. This is unique to each business so you’ll have to use your judgement here.
Once you’ve prepared all your templates and put in your data it’s now time to upload into Xero. Here’s how to import for:
Chart of Accounts
- Go to Settings > Chart of Accounts > Import
- There will be 2 questions. (1) What System are you importing from? - Choose Xero if you’ve used the template (recommended) or extracted your chart of accounts file from Sage or Quickbooks, otherwise, if you’re importing from a file extracted directly from MYOB, use MYOB and likewise, if extracted directly from Banklink, choose that. (2) Does the file contain account balances? - Choose “No”.
- Click the “Browse” button and choose your completed csv file from your newly created conversion folder and import it.
- Click the “View” link next to each report line - this allows to you make sure your data is created correctly. Pay attention to accounts that can’t be imported as a result of an error or accounts that have been deleted/archived. If the account can’t be imported, it may be that fields in your CSV file are missing. Make sure you check your csv file so that it contains everything needed to upload your accounts. If you need to edit the csv file again, click “Cancel” and fix it up. Then do the import again.
- When you’re happy, click the Confirm button to complete the import process. Note that sales and purchases accounts are not imported in Xero (because Xero will create them).
- Confirm Bank and Credit Card ACcounts - select the account type that you need and enter in your account details. Then save and you’re done.
- In the dashboard to the the bank account you wish to import a data to. Go to Manage Account > Import a Statement.
- Click “Browse” and select your template file and click “Import”
- In the “Assign To” column, make sure that the data is going to the correct area and that are matching to the right heading.
- Click the box “Don’t Import the First Line” - this is because the first line (row) is the column heading.
- Once you’re happy that the data matches, click “Save”
- Click “OK”
- Do steps 1 - 6 for the other available bank accounts so that all your data is entered.
Payments that haven’t been presented or uncleared funds
- Only do this if your trial balance from your old system doesn’t match your one in Xero after you’ve imported your contacts, inventory, sales, purchases, manual journals & fixed assets below.
- Go to your old system and find out which cheques you’ve written out or received haven’t been cashed out. Find out what the balance of this is - a balance is like the total that you hold at a certain date.
- In Xero, create an asset account called “Uncleared funds” and a liability account called “Unpresented payments” - put in the balance that you obtained from Step 1 in the newly created accounts.
- Create a spend money transaction and a receive money transaction.
- When the money hits your bank account, code them to the account “Uncleared funds” or “Unpresented payments”. Spend money transactions go to Unpresented Pyaments and Receive money transactions go to the Uncleared Funds account.
- Do this until your conversion balance = 0.
For Contacts, Inventory, Sales, Purchases, Manual Journals & Fixed Assets
- Go to the same location for each of the areas where you originally downloaded the csv/template file. The location for this is show in Step 5 (the first Step 5).
- Click “Browse” and select your template file and click “Import”
- Review the data that has been imported. For sales/purchases check that you’ve included any necessary credit/debit notes and that the tax is correct.
- If you’re happy with it, click the “Complete Import button” if you’re not happy with it, click “Cancel” then go back to your csv/template file and edit it.
- See additional steps below for Sales, Purchases, Manual Journals & Fixed Assets
Additional Steps for Sales & Purchases
- If you detect any problems after importing, you can just delete/edit the newly created invoice or purchase invoice.
- Check that the balance of the data imported matches that of the import balance.
- Approve your sales invoices/purchase invoices separately or as a batch. You do this by ticking the boxes next to each invoice and then clicking the “Approve” button.
Additional Steps for Manual Journals
- Review the journal details and when you’re happy click “Post”.
- Do the import process again for all your manual journals..
Additional Steps for Fixed Assets
- Review each individual item by click on it in the “Pending Items” tab and updating the details of your fixed asset if needed.
- Once you’re happy, click “Register” for any of the assets you wish to move from pending to the Fixed Asset Register. If you can’t do this, if might be because you don’t have Adviser access. You’ll need Adviser access to do this. Now you’re done!
Where to next?
Well there are more things you can do with settings up such as the below dot points (click on the link to go to that tutorial), or now you can get started on Part 3 - Creating a Contact List in Xero.