Multi-currency and other system differences - MYOB versus Xero | Jet Convert

Multi-currency and other system differences - MYOB versus Xero

There are System Differences between MYOB and Xero that will result in variations and special treatment of multi-currency in Xero. We recommend that Xero Advisers review this information prior to conversion in order to be well informed about these differences. Please note Jet Convert takes these differences into account during the conversion process.

Accounts Receivable and Accounts Payable

Xero has a single system account for Accounts Receivable and Accounts Payable. This account includes all Accounts Receivable and Accounts Payable including multiple-currency. In MYOB you can have an Accounts Receivable and Accounts Payable account per currency. To bring the MYOB data into Xero, we combine balances into ONE system Account for each Accounts Receivable / Payable. Any additional Receivable / Payable Accounts from the MYOB file are merged into this ONE system account in Xero. As a result there may be differences when comparing the AR/AP reports between MYOB and Xero.

Conversion Balances

In the MYOB file it may be possible for clients to have used multiple exchange rates for each currency on the one day. As an example, a client may have used a different exchange rate for a particular currency on the same day for sales, purchases and transactions in bank accounts. For the conversion balances, Xero uses ONE exchange rate in Xero for each currency. This ONE exchange rate is used to enter the balances for sales, purchases and the bank account. The exchange rate used during the conversion is provided by Xero using XE.com. Due to this there may be variations in the unrealised gains/losses account.

WARNING! Please do not change the figures in the conversion balances! They are extracted from MYOB during the conversion process. If you change these then the conversion balances will no longer match between MYOB and Xero.

We suggest you make any adjustments required in Xero after the conversion history start date or contact our office for guidance in amending the conversion balances.

Transactional Data

Each transaction that we convert from the MYOB file will use the fixed exchange rate as defined in the  MYOB file for that individual transaction.

Exchange Accounts

How MYOB and Xero handle multi-currency is quite different. During the conversion these variances have to be considered.

In MYOB each currency account has an associated exchange account. For example a foreign currency bank account will have an associated exchange account and a Foreign Accounts Receivable or Payable account will have an associated exchange account. In Xero there is one bank account for each currency, a single accounts receivable and a single accounts payable account. There are no associated exchange accounts.

In Xero there are three system accounts that manage foreign currency gains and losses across all of the foreign currency accounts. Including:

  • Bank revaluations for Gains and Losses (497) - This account holds the total difference between what the funds in the account were worth on the day of payment compared with today's exchange rate

  • Unrealised currency Gains and Losses (498) - This account calculates the unrealised gains or losses on unpaid invoices or bills, calculated at today's exchange rate.

  • Realised currency Gains and Losses (499) - This account calculates the gains or losses recorded between the date that the invoice, bill or credit note was created and the date of payment.

During the conversion the Unrealised Gains/Losses from MYOB will be merged into the Xero system account for Unrealised Gains/Losses. In addition the Realised Gains/Losses will be imported into the Xero system account for Realised Gains/Losses.

Please note that in Xero foreign currency is adjusted daily based on XE.com and the details are attached to all relevant transactions as a footnote at the time of conversion.

Exchange rates

In MYOB the Exchange rate is user entered and this is detail that is converted into Xero. Once data entry commences in Xero any new transactions will use Exchange rates that will fluctuate in accordance with the daily Foreign Exchange (FX) movements.

Data precision

During the conversion process, the precision of numbers, may be different between Xero and MYOB. In MYOB unit prices may be expressed with more than 4 decimal places. In Xero the unit prices are to 4 decimal places with the remainder of data to 2 decimals. Where this leads to differences in the invoice total, we automatically add adjusting invoice/bill lines.

Handling of GST

Xero has a single GST / VAT system account. MYOB has one for GST collected and another for GST paid. During the conversion Jet Convert combines these two GST accounts into one system account for GST.

Xero calculates tax on a per line basis, rounding to two decimal places, and then sums the tax totals of each line to calculate the total invoice tax. In contrast MYOB totals the Invoice and then calculates the tax amount, which can lead to a slight variance. If necessary we create a manual journal to cater for these variances.

Setup variation

In MYOB the Chart of Accounts setup can include Headers and Sub-accounts. Xero does not have header accounts in the Chart of Accounts however customised reports can be created to include headers. The conversion does not include customised reports.

Accounting Practices

In MYOB it is possible to journal to control accounts such bank accounts, accounts receivable and accounts payable. This can cause an out of balance between the subsidiary and control accounts. It can be a common occurrence in MYOB that Accounts Payable or Accounts Receivable are paid off with a single journal. Xero does not permit this way of handling transactions. In some instances we may create a secondary Accounts Receivable or Accounts Payable account in Xero to bring in manual journals that have been coded to the control accounts in MYOB.

Running Reports

When running Profit and Loss / Balance Sheet / Accounts Payable  / Receivable reports in Xero, there are system accounts (Unrealised currency Gains and Losses) that will change daily based on the current exchange rate. If you have foreign currency bank accounts, invoices or bills then running reports today may show different amounts for the same reports tomorrow.