This is part of our Getting Started with Xero series (Chapter 1 of the Xero tutorial hub):

• Lesson 1: Choosing the Right Xero Plan for Your Central Coast Business
• Lesson 2: Setting Up Your Xero Organisation: A Step by Step Guide
• Lesson 3: Building a Chart of Accounts for Your Trade or Service Business in Xero
• Lesson 4: Entering Opening Balances When You Switch to Xero
• Lesson 5: Getting to Know Your Xero Dashboard
• Lesson 6: Using the Xero Accounting App On the Job Site

If you are moving to Xero from another system, or from spreadsheets, you need to bring your account balances across accurately. These are called conversion balances, and getting them right matters more than people expect.

1. What conversion balances actually are

A conversion balance is simply the balance of each account (bank, GST, wages payable, and so on) as at the date you start using Xero. They give your new file an accurate starting point instead of beginning from zero.

2. Why this step is worth getting right

If your opening balances are wrong, your reports will be wrong from day one, and errors tend to compound rather than fix themselves. This is one of the easiest steps to get wrong when doing your own switch-over.

3. Where to enter them in Xero

Conversion balances are entered through the advanced accounting settings once you have set your conversion date (the date you actually start using Xero for real transactions).

4. Consider getting help for this step

Because errors here flow through to every report afterward, this is one part of switching software that is worth having a registered BAS agent check or handle for you, especially if you are moving from several years of records.

Xero Central and the official Xero YouTube channel both have step by step conversion guides: watch the official Xero tutorial.