System Differences and Transaction Type Issues

System Differences and Transaction Type Issues

When converting your accounting data into Xero, we aim to provide full transactional history if that was the service selection. However, in certain situations, we may only be able to convert limited history, no history or may not be able to proceed with the conversion at all. If this is the case, we will notify you as early as possible.

Any integrated add-ons

Due to system differences, Xero does not allow manual journals to be posted to Accounts Receivable (AR) or Accounts Payable (AP). This creates challenges when converting data from accounting systems that use integrated add-ons to post such journals.

Solution: We have developed a tool that creates a secondary AR/AP account set up as a liability or asset. This enables us to replicate these transactions where invoices or bills populate in Xero’s system accounts, while the manual journals are captured in the secondary accounts.

However, if non-standard transactions are used excessively or if AR/AP accounts are included directly in the journal entries, we may not be able to convert the data using invoices and bills.

Alternative Approach: In such cases, we can attempt to convert the data using manual journals instead. Please note that journals in Xero do not support linking to contacts, so the connection between the transaction and the contact will be lost.

Archived Chart of Accounts

All accounts (active or inactive) are included in the conversion to ensure historical transactions are preserved. You can delete/archive any accounts you no longer need in Xero after the conversion

For QBO data extraction may fail if accounts used in the past are now archived. 

Solution: Ensure all required accounts are active before submission.

Bills and Invoices with Bank Accounts as Line Items

If a bank account/credit card is used as a line item in a bill or invoice, it will cause issues during conversion, as Xero does not permit this configuration. Eg: Xero does not allow bank accounts to be used as line items in bills or invoices. 

Solution: Select a premium package with Bank Account mapping and change the bank account / credit card to an asset or liability.

GST set up as a bank account

In some accounting packages there is the ability to set up GST Collected and GST Paid accounts as Bank Accounts / Credit Cards. In Xero this action cannot be replicated and the system account for GST cannot be Bank Account / Credit Card

Solution: Select a premium package with Bank Account mapping to reclassify the GST accounts as current liabilities / assets.

Manual adjustment of GST

If GST values have been manually edited from 0% or 10%, the automated conversion may fail.

          

Solution: Before submitting your file for conversion, review GST transactional detail report and take note of any transactions with tax amounts other than 0% or 10%. Update these transactions in the source file to reflect either 0% or 10%. Once the conversion is complete, you can re-edit the tax amount if necessary.

Manual journals to control accounts

Due to system differences, Xero does not allow journals to control accounts such as Bank, Accounts Receivable (AR), or Accounts Payable (AP). This can create issues where these journals are present in the source data.

Solution: We use a conversion clearing account and secondary AR/AP account set up as a liability or asset to replicate these transactions and maintain data integrity. This allows the conversion to proceed where use is minimal.

Alternative Approach: If journals to control accounts are used extensively or in complex ways, we may be unable to convert the data using invoices or bills. In this case, we may convert the data using manual journals instead. However, please note that manual journals in Xero do not support linking to contacts.

Client-Side Option: To avoid these issues, clients may choose to apply payments directly against the invoices or bills in the source software instead of using direct entries or manual journals to AR/AP.

Multiple Accounts Receivable / Accounts Payable accounts

Xero supports only one system account each for AR and AP. We merge accounts where possible but cannot proceed if the accounts are too complex.

Client-Side solution: Merge all AR and AP accounts into a single account before conversion. To retain visibility of different account streams, consider implementing job tracking or categories in your source software prior to merging. This allows separate identification and reporting post-conversion.

Tax Codes used for both 0% and 10%

In some accounting packages you have the ability to set up and use Tax Codes as both 0% and 10%.  Xero requires consistent use of tax codes. If a tax-code is used for both 0% and 10%, we may insert a transaction line to balance these differences. A post-conversion email or report will detail any variances.

In some accounting packages you have the ability to set up and use Tax Codes as both 0% and 10%.  Xero only allows one to be applied consistently throughout its use. As a result, we often find that there is a BAS Discrepancy between the two file. This is due to Xero only including calculated GST in the Activity Statement and to deliver a file with the correct GST balance we include variance as a transaction line within the invoice or bill. We do provide an email post-conversion advising this variance so you can make the necessary adjustments if you wish, alternatively, you can provide this to your financial professional for their records.


In some source software, you may be able to use the same tax code for both 0% and 10% GST. However, Xero required consistent use of tax codes and only one tax rate can be assigned to a given code across the file.

When a tax code is used for both 0% and 10% in the source file, this inconsistency often causes a BAS discrepancy in Xero. This occurs because Xero only includes calculated GST amounts in its Activity Statement.

To address this:

  • We insert a variance transaction line within the related invoice or bill to reflect the correct GST balance.

  • A post-conversion email or report will highlight these variances, allowing you to:

    • Adjust if necessary, or

    • Share the report with your financial professional for their records.

Note: This is a normal part of the conversion process when inconsistent tax code usage is detected.

Tracked inventory

Tracked inventory cannot be converted. Please see here for instructions to set it up manually post-conversion.

Transactions with greater than 1,000 lines

Xero limits the number of transaction lines per invoice/bill to 1,000. Files exceeding this will fail to convert. We suggest investigating an alternative solution that will meet your needs.

Negative Discounts

Xero does not support negative discounts. 

Solution: Update negative discounts in the source file before conversion.

Multi-Currency 

Files using multi-currency cannot be converted. You may be able to disable this feature if no foreign currency activity exists.

Solution: Please see here for criteria and steps to remove multiple currencies.

Warning: Undeposited Funds Account

If your source data includes an Undeposited Funds account that is not set up as a Bank account and cannot be changed, please note that due to system limitations in Xero, transactions associated with a non-bank Undeposited Funds account cannot be linked to a contact. This is because Xero does not allow contacts to be applied to manual journals.

While your financial data will remain accurate, any reports generated by contact may appear incomplete or differ from expectations.

Recommendation:
If contact-level reporting is important to you, we suggest running and saving these reports from your source system before migration for future reference.

Please see here for the essential file preparation steps before uploading your file.

Watchouts in MYOB for Conversions

For MYOB Desktop Specifics

Negative Inventory

We cannot convert a file that has the negative inventory setting enabled. This means that there are Items that currently have a negative stock on hand.

If there is a negative inventory items this generally occurs when a sale is made however there is no available inventory. in this instances, the MYOB system will record the cost of goods for the item as per the last sales and COGS.

This is a temporary record which cannot be 'finalised' until the purchase have been received for this item and so MYOB creates a negin.dat record to track this item. Once the inventory item is received then MYOB will complete a cost of goods adjustment based on the correct purchase information. The negin.data tracking record will then be cleared.

Solution: For us to be able to convert correctly we need you to address the negative inventory. The reason is two-fold:
  1. Firstly with Negative Inventory switched on, we cannot complete the conversion using our software tool.
  2. Secondly, in order to switch off the Negative Inventory Preference (Setup > Preferences > Inventory), Purchase or Adjustments will need to be applied to bring all inventory to a positive or nil balance. When this is completed the negin.data records will in most cases be cleared, allowing you to switch off the Negative Inventory Preference.
  3. Solution: Turn off this setting by adjusting stock levels to zero or positive and clearing negin.dat records.

Verification Errors

The MYOB file will require data adjustments if it shows errors during the MYOB Verification process. This is because the data must be error-free to continue.

Solution: What you can do:
    1. If you receive a message from us that we were unable to convert due to the verification it may be possible that you can fix it yourself.
    2. Run 'Verify your Company' from the File menu in MYOB to replicate the errors in the file. If you are unable to fix the errors, MYOB may be able to assist: MYOB Company Data file repair
    3. If you can fix so the file can run through the verification process without erroring then rezip and resubmit your file for conversion.
    1. Alternatively, FGH Tables may be able to assist

Open Orders With Received Items

If your MYOB file has Orders with Received Items you will need to receive those orders before we can convert the file. This is because an item's value cannot be determined until it is a bill.

Solution: Convert all received orders to bills using tomorrow's date and 'N-T' tax code to finalise the cost of goods and clear tracking records.

All of the Orders with a 'tick' in the Received column are for Inventory and these are Orders that must be converted to a Bill. The tick indicates the user used the Received Items feature under the Inventory Command Centre to tell MYOB these Inventory Items Ordered have been received, However, the Invoice from the Supplier has not been received and the exact cost has not been recognised. What is meant to occur once the Bill arrives is that these Orders should be converted to a Bill. Unfortunately, many users don't do this.


The way MYOB operates is that it creates a temporary record that cannot be 'finalised' until the order is converted to a bill. Behind the scenes, MYOB creates an inventory tracking record to track this information. Once the inventory item is billed then MYOB will complete a cost of goods adjustment and the tracking record will then be cleared. At the moment in this file, there are tracker records that will need to be addressed prior to the data migration into Xero.

If these orders are now converted to a Bill it may double up the inventory/Creditors/GST etc.

Due to this, we need the user/s to make the necessary changes in the MYOB file in addition to any corrections required as only they know what has occurred. For example, have the items actually been received, has the invoice been paid etc., and the correct stock on hand figure.

One option that has been suggested is that the Orders be converted using the same date, and changed from GST to N-T. This allows the user to see the overall effect by studying transactions on that date, it also avoid unintended BAS implications.

If all Orders are processed hopefully this will remove the inventory trackers that are prohibiting conversion. 

.MYO

For .MYO conversions the amount of transactional history we can will depend on which financial year the .MYO file is sitting in.

For Both MYOB Desktop & Online Specifics

What you need to do - files with NO items against open orders

The next step for you is to adjust the items with negative inventory and reload the file for conversion. To update this information in MYOB you complete the following:
  1. Prepare a current Inventory value reconciliation report.
  2. Export this report and 'sort' by value so the items with a negative on-hand count appear at the top. This will show you the items that need adjusting.
  3. Make a backup as MYOB may process some transactions that cannot be reversed. Then either process a Purchase, or enter an Inventory Value Adjustment journal to bring the on-hand count to 0 or more. If doing an Inventory Adjustment Journal, it is recommended you use tomorrow's data and initially leave the adjustment value as $0.
  4. After processing the Purchases or Inventory Adjustment Journals, it is recommend you review all system transactions generated by MYOB. Look under the Transaction Journal > Inventory tab, with dates set to the date used. You may then need to process adjusting transactions to reverse the effect of the system generated transactions. If unsure, you should consult with your bookkeeper or accountant.
  5. Switch off the Negative Inventory Preference. If MYOB does not allow you to de-select it this indicates that not all negin.dat records were cleared. The file may need to be repaired to remove these records manually. FGH Tables may be able to assist with this.

What you need to do - files WITH items against open orders

The next step for you is to adjust the items with negative inventory and reload the file for conversion. To update this information in MYOB you complete the following:
  1. Make a backup as MYOB may process some transactions that cannot be reversed.
  2. Open the Purchases Register and set the dates from the earliest date the file was used to the latest transaction date, or 1 July 1900 to 31 Dec 9999 if unsure. Select the Orders tab. Identify any Orders with a tick in the Received column. These are Orders for Items marked a Received and sold. As with the Negative Inventory Items, MYOB tracks these Sales until this Order is converted into a Bill. Only then does MYOB finalise the COGs for the sale and clear the negin.dat record. It also reverses temporary transaction posted to your Inventory Accrual account. Open each Order and convert it to a Bill. Use tomorrow's date and ensure all Items have N-T as the tax code.
  3. Prepare a current Inventory value reconciliation report.
  4. Export this report and 'sort' by value so the items with a negative on-hand count appear at the top. This will show you the items that need adjusting.
  5. Then either process a Purchase, or enter an Inventory Value Adjustment journal to bring the on-hand count to 0 or more. If doing an Inventory Adjustment Journal, it is recommended you use tomorrow's date and initially leave the adjustment value as $0.
  6. After processing the Purchase or Inventory Adjustment Journals, it is recommended you review all system transactions generated by MYOB. Look under the Transactional Journal - Purchases and Inventory tabs, with dates set to the date used. There may be none, or there may be hundreds. You may then need to process adjusting transactions to reverse the effect of the system generated transactions, including a Service Credit to apply against the Supplier balance. If unsure, you should consult with your bookkeeper or accountant.
  7. Switch off the Negative Inventory Preference. If MYOB does not allow you to de-select it this indicates that not all negin.dat records were cleared. The file may need to be repaired to remove these records manually. FGH Tables may be able to assist with this.
If successful please reload the file for conversion.

Deposits Against Orders

There are system differences between MYOB and Xero. For example, in MYOB you can apply deposits against orders whereas in Xero you cannot.

A deposit paid on an order will result in a payment before the invoice is created. An order does not have a debit and credit entry and is not structured like an invoice. An order is just a flat document and does not comply with accounting rules. Deposits paid on orders in MYOB at the time of conversion will result in an Out of Balance.

During the conversion process, our conversion tool will go through the information in the 'accounts' and identify any account that has been 'linked' in MYOB. For example, 'customer deposits' linked to 'trade debtors'.

During the conversion 'orders' are converted as 'draft invoices' and any 'deposits' are created into Credit Notes. The Conversion Process creates a Credit Note for the amount deposited.  There will be a separate Credit Note for each Deposit and Contact.

In Xero, you will need to determine if the order should stay in 'Draft', be deleted or needs to be approved (processed). If the deposit needs to be allocated against an Invoice in Xero you can complete the following post-conversion:
  1. Identify the draft invoices that need to be approved.
  2. Approve the 'draft invoice so that this is now appears in 'awaiting payment'.
  3. Allocate the Credit Note against the relevant Invoice.
If you prefer to have your deposit account separated then you can complete the following:
  1. Create the deposit account in the Chart of Accounts.
  2. Move the balance from the Trade Debtor/Creditor to the relevant deposit accounts.

NotesNote: There could be a "deposit out of balance" issue. This can happen if your deposit account is not balanced to all open deposits against orders. If it is balanced, it will be $0 and all deposits show up as credit notes.

Multi-Location Files - MYOB

Xero does not accept multiple locations so we are unable to convert files with this feature.

Solution: If you would like to reduce multiple locations to a single location, FGH Tables may be able to do this for you. Whilst reducing to a single location may help, success is not guaranteed.

Files with Linked Accounts Receivable/Payables

In some source accounting software, bank accounts can be set as the system accounts for Accounts Receivable (AR) and Accounts Payable (AP), This configuration is not supported in Xero. In Xero, bank accounts cannot be assigned as system accounts for receivables or payables.

Additionally, Xero requires that AR/AP accounts are only used once specifically as a system account for raising Invoices/Bills and credit notes.  

For example: You might have used one of these accounts as a linked accounts for the undeposited funds account; or trade debtors for both purchases and sales.

Correct

Important Considerations

  • If the source file has multiple linked Accounts Receivable / Payable accounts, it may be ineligible for conversion.

  • Trade Debtors and Trade Creditors should not be reused or relinked beyond their system designation.

Client-Side Solution: Ensure trade debtors/creditors are not linked to multiple functions (e.g., undeposited funds). These accounts should be system accounts for invoicing only. If the trade debtor and/or trade creditor(s) have been used as a linked account elsewhere in addition to sales or purchases, the file will require data adjustments or the conversion may be unsuccessful.

Solution: Select a premium package with Bank account mapping to reclassify the accounts appropriately as Assets / Liabilities. Please not whilst tis may be successful in some instances, this update will not correct the linking retrospectively and we may not be able to provide a transactional history conversion. 

INP Tax Codes in MYOB

If the INP codes include GST, we will split the transaction to ensure GST balance matches the source file. This will ensure that the tax matches the source file.

Next Steps

  • Review your file for the above issues.

  • Make necessary corrections or select the premium package if applicable.

  • If unsure, consult your accountant or reach out to our support team for assistance.


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