Section 5 - Conversion Balances

Conversion balances form the opening balances of your accounts in Xero. You
can enter conversion balances at any time, but reporting and bank balances
won’t be accurate until they’ve been entered .
Conversion balances will only need to be entered for a business that has been
trading prior to using Xero. If you’re a new business, you don’t need to add
conversion balances.
To access your conversion balances:
1. Go to the Accounting menu
2. Select Advanced
3. Under Advanced settings, choose Conversion balances

CONVERSION DATE
The conversion date is usually the date you start using Xero. The only transactions
you should enter in Xero dated before this date are invoices and bills that
were unpaid when you converted.
Your conversion date can be the start of the month, start of the financial year or
at the end of a BAS or GST period.
Activity 5.1 - Add a conversion date
Go to the Conversion Date button and enter the conversion date below. Don’t
forget to save.
CONVERSION DATE January 2023

You’ll then be led to the screen to enter the opening/conversion balances.

These balances can be entered against the appropriate chart of account.
Learn more about Conversion Balances in Xero by clicking here -
https://central.xero.com/s/article/Enter-conversion-balances

Activity 5.2 - Enter opening balances

Enter the following balances as at the 31st December 2022. If you prefer, select
Show all accounts for visibility of all the account codes available. You may need
to change an account code name to match exactly to the list you’ve been given.
You will also need to add a new chart of account code if the code is not available
within the Xero default list. This can be done by selecting Add a new line and
clicking into the Account box - This will give you a drop down option, with the
ability to Add a new account.
Alternatively, choose a similar account and change the name from within the
chart of accounts.

ENTER/ADD THE FOLLOWING CONVERSION BALANCES

Account name A/C code Debit Credit
BANK CURRENT ACCOUNT 100 47,398

SALES (MEMBERSHIPS) 200 128,400

SALES (PERSONAL TRAINING) 201 60,640

SALES (FITNESS CLASSES) 202 57,600

SALES (CLOTHING) 203 3,780

PURCHASES (GOODS FOR RESALE) 300 1,120

PURCHASES (OTHER) 301 48,860

ADVERTISING 400 3,560

HEAT, LIGHT & POWER 445 17,200

PRINTING & STATIONERY 461 4,400

RENT 469 28,000

SALARIES 477 88,040

ACCOUNTS RECEIVABLE 610 720

OFFICE EQUIPMENT 710 24,600

LESS ACCUMULATED DEPRECIATION

ON OFFICE EQUIPMENT 711 7,780

GYM EQUIPMENT 730 (new) 31,200

LESS ACCUMULATED DEPRECIATION

ON GYM EQUIPMENT 731 (new) 9,600

ACCOUNTS PAYABLE 800 990

LOAN 900 8,600

OWNER FUNDS INTRODUCED 970 17,708

TOTALS 295,098 295,098

If the opening Receivable or Payable balances do not agree with

the customer and supplier balances you entered earlier, you’ll
be prompted to check and make any changes. To make the
change, Go to the Business tab, click on the Sales or Purchases
overview, find the incorrect invoice or bill and select Invoice/
Bill Options. Click Edit, make the changes and click Update.