Xero conversion balances are the opening balances of your accounts in Xero: a copy of your old system's trial balance as at the day before you start using Xero. If your conversion date is 1 July, you enter the trial balance dated 30 June. You enter them under Accounting settings > Conversion balances, along with every unpaid invoice and bill that makes up your receivables and payables, and any bank items that hadn't cleared. When the balance sheet in Xero doesn't match the old trial balance, it's almost always one of a handful of causes: the report is run for the wrong date, debits and credits didn't balance so Xero posted the difference to Historical Adjustment, transactions dated before the conversion date were added later, or bank and GST accounts were entered differently. This guide is for the finance manager or bookkeeper doing the conversion, and it follows Xero's own help articles as at October 2026.
What conversion balances are (and what they aren't)
When you save conversion balances, Xero posts a conversion journal dated before your conversion date so each account's opening balance equals what you entered. Every time you click Save, Xero reverses the previous conversion journal and posts a new one. That has two consequences worth knowing:
- You can fix balances later. Change the figures and save again. Xero replaces the old journal rather than adding to it.
- Manual journals don't work as opening balances. If you post opening balances as manual journals and then save anything on the Conversion balances screen, Xero adjusts the accounts back to what's on that screen. Xero's advice is to always use the Conversion balances screen.
Conversion balances carry balances only, not history. If you want last year's figures for comparison, that's a separate step (comparative balances, covered below). If you want full transaction history in Xero, you'd use a conversion specialist or a migration service instead of entering balances by hand.
Moving from MYOB in particular? Our step-by-step guide to converting a MYOB trial balance to Xero covers finalising MYOB, exporting the reports and mapping accounts. This post focuses on the Xero side, whichever system you're coming from.
Choosing the conversion date
The conversion date is the first day you process every transaction in Xero. Xero works in whole months, so it's always the start of a month and your balances are as at the last day of the previous month.
Things to weigh up:
- Start of a financial year (1 July) is the cleanest. Your income and expense accounts start at zero, and every Xero report for the year comes from one system.
- Start of a BAS quarter (1 October, 1 January, 1 April) is the next best. Lodge the last BAS from the old system and the next one from Xero. Converting part-way through a quarter means preparing one BAS from two systems.
- Mid-year is fine if it has to be. Your profit and loss accounts carry year-to-date balances into Xero, and reports for the current year will still show the right totals.
- Pick a date the old system can be closed to. Bank reconciliations, payroll, depreciation and GST should all be finished up to the day before the conversion date before you take the trial balance. If the old system is still changing, the numbers you enter will be out of date.
You can change the conversion date later in the Conversion balances screen. If you have a lock date, only a user with the administrator (adviser) role may be able to save the change.
Entering conversion balances, step by step
Xero offers three ways to get them in: type them in on the Conversion balances screen, include them in a chart of accounts import file (you can't import balances on their own), or have a conversion specialist do it. For most businesses with a tidy chart of accounts, typing them in is quickest.
1. The trial balance
- Get the old system's trial balance dated the day before your conversion date.
- In Xero, go to Accounting > Accounting settings > Conversion balances and click Show all accounts.
- Enter each balance in the Debit or Credit column. Enter everything as a positive number, even if the trial balance shows it as negative.
- Check that total debits equal total credits before you save.
Xero only uses one GST account. If the old system split GST across several accounts (GST collected, GST paid, GST clearing), add them together into Xero's GST account.
2. Bank accounts and unpresented items
For bank and credit card accounts, Xero says to use the bank statement balance as at the day before the conversion date, not the trial balance figure. The two differ when there are unpresented cheques or deposits not yet banked.
Xero's suggested way to handle unpresented cheques:
- Create a current liability account called something like "Uncleared Cheques".
- Enter the total of the unpresented cheques as its conversion balance.
- When each cheque clears the bank, reconcile it with a spend money transaction coded back to that liability account, not to the original expense (that expense was already recorded before conversion).
The same idea works for money received but not yet banked, using a current asset account. Once every unpresented item has cleared, the clearing account should be back to zero.
3. Receivables and payables
The accounts receivable and accounts payable balances must be backed by the individual items that make them up. Xero won't save your conversion balances until they match exactly.
- Enter each unpaid sales invoice, customer credit note, supplier bill and supplier credit note, dated with its original date (before the conversion date).
- Use the outstanding amount, not the original amount, for anything part-paid.
- Use the old invoice numbers so customers' remittances still make sense.
- Make sure each one is approved, and don't use spend or receive money transactions here.
- If there are a lot of them, import them as a file instead of typing them in.
Also enter any customer or supplier overpayments and prepayments, and unpaid expense claims, dated before conversion, with their totals included in the conversion balances.
Don't reconcile your bank accounts in Xero until these items are in, or you'll end up creating duplicate transactions when customer payments arrive.
4. Inventory
If you'll use Xero's tracked inventory, set the inventory account balance to the value of stock on hand, then import the items and their opening quantities after saving conversion balances. Don't use tracked inventory items on the opening invoices and bills, or the stock gets counted twice.
5. Tracking categories
The Conversion balances screen has no tracking column, so opening balances show as "Unassigned" in tracking reports. The opening invoices and bills can carry tracking options on their lines, so receivables and payables can be split by branch or division. If you need other opening balances split by tracking option, agree the approach with your accountant first, usually a reclassification journal that nets to zero for each account. See our guide to Xero tracking categories for how the categories themselves work.
6. Comparative balances (optional)
To compare this year with years before Xero, click Add Comparative Balances on the same screen and enter each prior year-end trial balance. They have to be typed in (they can't be imported), and you don't need supporting invoices for them. If you want monthly comparisons for the year before conversion, post a manual journal for each month and then re-save the conversion balances.
Why the balance sheet doesn't match the trial balance
This is the most common question after a conversion. Work through these in order.
The report is run for the wrong date
Conversion balances sit at the end of the day before the conversion date. A balance sheet run as at the conversion date itself includes the first day's transactions. Run the Xero balance sheet and trial balance as at the day before the conversion date and compare those.
There's a balance in Historical Adjustment
If total debits and credits didn't match when you saved, Xero posts the difference to a system account called Historical Adjustment. Any balance there means something was keyed wrong or left out. Common culprits: a negative number entered as negative instead of in the opposite column, a missed account, or a figure typed in the wrong column. Fix the balances until debits equal credits and the historical adjustment disappears.
Open foreign currency invoices or bills can also create a historical adjustment, because of exchange rate differences at the conversion date. Xero's advice is to include any unrealised currency gains or losses as at the conversion date.
Transactions dated before the conversion date were added later
Bank feeds sometimes pull in transactions from before the conversion date, or someone enters an old invoice after the balances were saved. Xero says you must update your conversion balances whenever you enter more pre-conversion transactions. To find them, run the Account Transactions report for a period ending the day before the conversion date. It shows pre-conversion transactions, the conversion journals and each account's total.
Bank figures were entered differently
If you used the statement balance and an "Uncleared Cheques" account, the bank line on the Xero balance sheet won't match the old trial balance's bank line. The bank account plus the clearing account should equal the old figure.
Accounts were combined or mapped differently
If two old accounts were combined into one Xero account (GST is the usual one), individual lines won't match even though the totals do. Keep a mapping sheet of old accounts to Xero accounts so you can show the reconciliation.
Profit and retained earnings look wrong
Xero calculates current year earnings from the profit and loss accounts. If the old trial balance had already closed this year's profit into retained earnings, and you entered the income and expense balances as well, the profit is counted twice. If converting on 1 July, income and expense accounts should be zero and last year's profit should sit in retained earnings.
Checks before you sign off
- Trial Balance report as at the day before conversion matches the old system, account by account (allowing for documented mapping).
- Historical Adjustment is zero.
- Aged Receivables and Aged Payables for the day before conversion match the old system's aged reports, customer by customer and supplier by supplier.
- Bank balances equal the bank statements, with unpresented items sitting in their clearing accounts.
- GST matches what's due on the last BAS lodged from the old system.
- Journal report for the day before the conversion date shows the latest conversion journal.
- Lock date set at the day before conversion once your accountant agrees, so nobody changes the opening position by accident.
Frequently asked questions
What date should my trial balance be for Xero conversion balances?
The day before your conversion date. If you start using Xero on 1 July, use the trial balance dated 30 June. This applies whether you enter the balances yourself or use a conversion tool or service.
Can I start using Xero before entering conversion balances?
Yes. Xero lets you start without them, but your reports and bank balances won't be right until they're entered. You can come back and finish them, and re-save as often as you need.
Why won't Xero let me save my conversion balances?
Usually because the unpaid invoices and bills don't add up exactly to the receivables and payables balances, or there's a lock date and you don't have the administrator role. Xero shows the difference after you try to save, and you can add or remove items from that screen.
How do I deal with unpresented payments at conversion?
Enter the bank account at its bank statement balance, put the unpresented payments in a separate current liability account, and code each one back to that account when it clears the bank.
Should I enter conversion balances or migrate full history?
If you only need opening balances and last year's comparatives, entering balances is simpler and keeps Xero clean. If you need old transactions in Xero for audits, job history or customer statements, a full migration is worth considering. See our MYOB to Xero migration and accounting data migration services.
If your conversion involves several entities, foreign currency, a messy chart of accounts or a balance sheet that still won't tie out, we can help work through it. Book a free initial chat and we'll tell you whether it's a quick fix or a bigger job.