Conversion Clearing Accounts

Conversion Clearing Accounts

Due to system differences between accounting platforms, we may use clearing accounts to assist in transferring certain data. 

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 enable us to reproduce the data from your old accounting package as accurately as possible.

Amending Conversion Balances

We will have converted the balances as they are in the source file that was provided for conversion. Conversion clearing accounts are always delivered with a zero balance and archived in the Xero file prior to transfer. There are some 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 can result in differences between the accountant's reports and what you had in the source file and converted into Xero. 

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 Ensure that any of the accounts you are updating have not been archived. If accounts have been archived you will need to restore these accounts.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 have a balance in the conversion clearing account this usually indicates that you have deleted, voided or amended a transaction post conversion that has direct reference to the conversion clearing account - however, you have not deleted the corresponding amount.
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. 

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