1.0 Xero Migration
Xero Migration is always easier than you think, as Xero is able to read raw data files from accounting software. Users would only need to export their files into the CSV file format for Xero to read the data information.
Users would first have to understand the conversion date and balances, which are the date they would want to start recording transactions in Xero and the opening balances in Xero respectively.
There are three ways to import the conversion balances which are manually entering the amount into Xero, importing a CSV file into Xero and using the conversion toolbox.
As for the historical balances of the organization, where users would find it easier for audit purposes to keep all data information into one system, users are allowed to enter up to 5 years annual balances into Xero. Users would have to export past annual balances from the previous accounting software, into CSV file format, then import it into Xero.
2.0 Xero Migration Process
2.1 Preparation before Xero Migration Process
- Add your organization to Xero
Enter the name of your organization and complete other fields such as where your organization pay taxes and the currency used. Take note that these two fields could not be changed after adding your organization. If either of these changes, users would have to add a new organization.
- Choose the date to start recording transactions in Xero
The conversion date is the date of the organization’s opening balances in Xero, which is usually the date users starting to use Xero to record transactions. Bearing in mind that the only transactions that users should enter into Xero, dated before the conversion date, are unpaid bills and invoices before the conversion.
- Add a bank account and enter its opening balance
Bank feeds are available for banks that have their names listed on Xero’s list. In the case where the name of the bank is unavailable on the list, users would have to manually import bank statements into Xero.
2.2 Import data from previous accounting system
Xero allows users to import data such as chart of accounts, customer invoices, supplier bills, contacts and fixed assets in bulk via CSV files. To avoid duplication, it is better to import invoices and bills before adding contacts. Xero will automatically add the suppliers and customers’ names founded in bills and invoices into the contacts.
2.3 Enter historical transactions
Starting from the conversion date, users would have to enter any bills or sales invoices that have not imported into Xero. Besides, any transactions related to cash in and out which do not have relatable bills or invoices should be entered into Xero too.
2.4 Process payments and reconcile bank account
- For amount received or paid which are relatable to invoices or bills entered, users would have to enter the amount on the specific invoice or bill.
- Apply for a bank feed for banks that are listed on Xero’s list.
- Reconcile bank account by matching the statement lines with the transactions recorded in Xero. Xero will automatically provide suggestion for a match in between. If the suggestion were correct, users could simply match it by clicking “OK”, otherwise users could change the match to other transactions or create new one to match it.
- In the case where users could not set up a bank feed or import bank statements into Xero, they could simply mark the transaction as reconciled when they can match the transaction to their respective bank accounts.
2.5 Xero Migration Toolbox
The Xero Conversion Toolbox is an import tool for Xero Partners. It semi-automates and speeds up the import process which saves users time and reduces data entry problems.
A. How it works
It lets partners to securely connect to clients’ Xero organisation for 30 minutes at a time to import at a range of data. Raw files from client’s previous software is required.
B. Benefits of the toolbox
- Supports all source from any software as long as the file is in CSV format
- No line restrictions
- Less data manipulation
- Time saving
- Data visibility
- Import notifications
C. Pre-conversion Checklist
- Importing a chart of accounts
- Get import files
- Add tracking to invoice lines
- Check that the CSV file contains the required paid fields (paid amount, paid account and payment date)
- If importing paid invoices into a bank account, add the bank account in Xero, assign it a chart of account codes and include exchange rate for payments with foreign currencies.
- If importing foreign currencies; Set up the foreign currency rates in Xero before running the conversion and include the exchange rate in the import file for each transaction and payment.
3.0 Advantages of switching to Xero
- Always accessible, Xero allows users to access to their data anywhere, using any device.
- Same data, with data stored in cloud, all users are able to work from the same information at the same time. Xero made real-time changes to ensure every user works with the most up-to-date information.
- Secure storage, where the cloud stores data securely and provides automatic back up. Hence, there is no risk of theft or data loss.
- Data flow, Xero connects to data sources like financial institutions, to provide benefits to users such as bank feeds that bring information straight into the organization. This reduces chances of errors and reduce information processing time.
- Efficient where Xero provides users with features such as Xero Dashboard, following up overdue invoices by setting up automatic email payment reminders to customers, customizing different styles of invoices for specific customers
- Less maintenance as cloud software updates are automatic and seamless, so it saves users time and money from keeping