Conversion Clearing Accounts

Conversion Clearing Accounts

Due to system differences between accounting platforms, we use clearing accounts during the conversion process to help transfer certain data. These accounts enable us to accurately replicate the financial information from your original software into Xero.

For MYOB files these accounts are called:
  • Conversion Clearing Account (199)
  • and Conversion Clearing Bank Account (198)
  • GST Clearing Account (standard MYOB code)
For Reckon conversions these accounts are called:
  • Conversion Bank Clearing Account (Jet1)
  • Conversion Clearing Account (Jet2)
  • and GST Clearing Account (standard Reckon code)
For other conversions these accounts are called:
  • Conversion Clearing Account (199)
  • Conversion Clearing Bank Account (198)

These accounts are temporary and form part of our internal process to ensure your historical data is accurately and reliably replicated in Xero. Each transaction recorded in a conversion clearing account includes a debit and a corresponding credit, ensuring that the account always balance $0.

At the end of the conversion process, these accounts will have a $0 balance and are archived automatically.

Amending Conversion Balances

We convert balances exactly as they appear in the source file provided at the time of conversion. Conversion clearing accounts are delivered with a $0 balance and are archived in Xero before the conversion is complete. 

There may be  instances in which you may need to amend the Conversion Balances in Xero. Some of the common reasons for this include:
  1. Messy legacy data.
  2. The conversion has been conducted before the previous year's financials having been finalised by the accountant.

These situations may lead to discrepancies between the accountant’s final reports and what was present in the source file at the time of conversion.

We suggest working with your accountant or bookkeeper to follow the steps below to amend the conversion balances in Xero:
  1. Unlock the financial period so that you can amend the conversion balances
  2. Ensure the conversion date is correct, for example, check to ensure you are updating the correct conversion date ie: the 2022 Financial year and not the 2023 Financial year, update this if necessary.
  3. Ensure that any of the accounts you are updating have not been archived. If accounts have been archived you will need to restore these accounts.
  4. Update the conversion balances as per the accountant's financials. Using the trial balance is usually the easiest method.
    1. Note: If there are changes in the Trade Creditor or Trade Debtor amounts then you will need to add or delete these invoices/bills to match the figure you would like seen in the conversion balance.
    2. Note for businesses: Accountants may use different account names and codes compared to what you use in Xero. Speak to your accountant or use your best judgement to allocate accordingly.
  5. Update and 'save' the conversion balances
  6. Re-lock the financial period.

If there is a balance in a clearing account

Each transaction in the conversion clearing account has a Debit amount and corresponding Credit amount.  If you now have a balance in the conversion clearing account this usually indicates 

  • Transaction/s linked to the clearing account has been deleted, voided, or amended after the conversion

  • and, the corresponding entry was not removed or adjusted

This results in a balance in the conversion clearing account.

Alert
You will need to investigate why these amount/s have been deleted, voided or amended in order to decide how to manage the balance in the conversion clearing account some options include.

Option 1: Re-creating the transaction/s

To do this you will need to restore the conversion clearing account from the chart of accounts. Re-create the deleted transaction and possibly manually reconcile the transaction. Once the conversion clearing account is balanced back to $0 please re-archive the clearing account so that this cannot be selected for transactions in the future.

Option 2: Delete the corresponding amount/s

Identify the corresponding amount and delete the associated transaction. Once the DR and the CR for the transaction have been deleted you can re-archive the clearing account.  You will need to investigate why these amount/s have been deleted, voided or amended in order to decide how to manage the balance in the conversion clearing account.

Info
This can be quite a detailed and intensive process, if you would like assistance in managing these transactions we have partnered with a leading expert in conversions and Xero. Please make contact via our website for a quote.

Option 3: Reconversion

If there has not been much work completed in Xero and the source data has been updated to reflect the Accountants financials then an option may be to reconvert the data. This may incur a reconversion fee. 

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