Learn how to convert your Xero account to QuickBooks Online.
Do you want to move your accounting data from Xero over to QuickBooks Online? Switching accounting software is a big step for any business. We’ve partnered with Dataswitcher who specializes in accounting software conversions to ease the process of moving from Xero to QuickBooks Online.
Use this guide to learn how to best convert your data. Since every system varies in how they handle accounting, it is important you take time to understand what the conversion entails, its limitations, and recognize the risk of data error.
Overview:
- How the conversion process works and system requirements
- What will be migrated and fees
- Xero data that will not be converted
- Conversion limitations
- How we protect your business data
Conversion process:
- Step 1: Pre-conversion checklist for QuickBooks Online
- Step 2: Pre-conversion checklist for Xero
- Step 3: Get started converting your data to QuickBooks Online
- Step 4: Post-conversion checklist for QuickBooks Online
How the conversion process works and system requirements
Plan ahead
We recommend you consult with a certified accounting professional such as a QuickBooks ProAdvisor or a QuickBooks Solution Provider if you are not familiar with accounting transactions. They can prepare your existing books, help with the conversion, and verify the data after the migration.
We recommend converting your book after the quarterly or yearly book is reconciled. This minimizes impact to your business transactions.
A conversion project can take as little as a few days to a few weeks depending on the required effort for pre and post conversion. The processing time from Dataswitcher’s conversion wizard spans from a few minutes to several hours depending on the amount of the data received.
It is important that you export reports from Xero and save them in a safe location even after the conversion is done for the tax or financial audits. Please seek advice from your accountant and/or tax advisor.
Requirements
Product version requirements
- Xero: You must be using a Xero US account.
- QuickBooks Online: You must have a paid subscription to QuickBooks Online US. Be sure you have a QuickBooks Online plan that supports the right features to convert your data successfully:
- For more than 250 accounts in your chart of accounts in Xero, you need QuickBooks Online Advanced.
- For classes, you need QuickBooks Online Plus or Advanced. For more than 40 classes, you need Advanced.
- For inventory, your need QuickBooks Online Plus or Advanced.
- To manage bills, you need QuickBooks Online Essentials, Plus or Advanced.
User permission levels
The user performing the conversion must have proper permission:
- Xero US: standard or advisor role
- QuickBooks Online: company admin permission
What will be migrated and fees
Dataswitcher will convert up to 2 fiscal years of the following data from Xero to QuickBooks Online at no charge:
- Opening balances
- Invoices and credits (AR)
- Bills and credits (AP)
- Bank account transactions
- Spend money
- Receive money
- Transfers
- Matched payments (AR and AP)
Dataswitcher also provides options to convert the following with an additional fee:
- Additional years of fiscal data
- Inventory items
- Tracking categories and options (Classes & Locations in QuickBooks)
- Company information (address, email, phone number etc.)
Fees will be quoted in the Dataswitcher conversion wizard prior to the conversion.
If you decide not to purchase additional years, then the transactions from the prior years on file will be consolidated into an automatically calculated opening balance.
Xero data that will not be converted
- Assembly builds
- Budgets
- Memorized transactions
- Deleted transactions
- Draft or unposted journals
- Jobs that are not attached to transactions
- Closed or partially closed estimates and purchase orders
- Bank reconciliation history
- File attachments
- Invoice template and other templates
- Terms list
- Employees list
- Payroll information, if any (employee details, pay calendars, tax information and pension, etc.)
- Project details, if any (quotes and estimates, tasks and expenses, profitability, etc.)
- Fixed assets management
Conversion limitations
Because the systems subtly vary on how they are handling accounting, it is not always possible to convert everything and for all of your accounting period. Hence it is important for you to understand some of the conversion limitations.
Customized chart of accounts
System accounts (i.e. Retained Earnings, Accounts Receivable, Accounts Payable, etc.) that are renamed or customized in Xero may be converted to suspense accounts showing up as Customers or Vendors in QuickBooks Online. These should be remapped later. Renaming the normal balance sheet accounts in Xero has no such implications though. Learn more about QuickBooks Online Chart of Accounts.
Multi-currency transactions
Transactions of different currencies in Xero will be converted into the home currency configured in QuickBooks Online. If you have transactions in euros in Xero and your home currency in QuickBooks is US dollars, all transactions will be converted to US dollars using the exchange rates in Xero. There will be no unrealized foreign currency gains or losses for your customers and vendors. The rounding differences from conversions will show up and be reflected as a P&L item in QuickBooks Online.
Journal merge
The journals related to Credits, Prepayments and Overpayments in Xero will be merged to keep an accurate balance on all accounts when converted to QuickBooks Online.
Tracking categories and options
Tracking categories and options in Xero will become Classes and Locations in QuickBooks Online. You can only allocate one Department/Location per transaction in QuickBooks Online. When converting to location, if you have transactions using multiple options per line item in Xero, the line item 1 of those options apply across all line items because only a single location per transaction is allowed in QuickBooks Online.
AR and AP transactions
In cases where Account Receivables and Account Payables Aging balances do not match with AR/AP GL balances (rarely happens), the discrepancy will be posted to Customers or Vendors.
Sales tax
Sales tax is converted as a line item in QuickBooks Online. Sales tax items are converted too, though the default sales tax codes assigned to customers in Xero will not be converted. Learn more about QuickBooks Online Sales Tax.
How we protect your business data
Your business data is protected by Intuit in the following ways:
- As long as you upload your data into the designated Dataswitcher conversion wizard, we will protect your data using industry standard SSL encryption.
- Your data is governed by Intuit’s Data Stewardship Principles.
Conversion process
Step 1: Pre-conversion checklist for QuickBooks Online
Be sure your company file in QuickBooks Online is blank. Having company details, users and setting permissions is fine.
Your company file in QuickBooks Online should not have financial transactions or customized Chart of accounts. These can be overwritten by the migrated data.
- If your company file has financial transactions or a customized chart of accounts, you can purge company data and configure the following settings in your QuickBooks Online file:
- Confirm home currency
- Turn off taxes
- Turn on tracking classes and locations (only if converting classes)
- Turn on per line item (default setting)
Step 2: Pre-conversion checklist for Xero
In order to get the highest quality conversion, follow the steps in the order outlined below to make sure your Xero data is in the best shape for the conversion.
Reconcile your accounts in Xero (mandatory)
Reconciling your bank accounts in Xero so they transfer cleanly to QuickBooks Online. After reconciling, make a note of the balances of your bank accounts. This information will be needed when preparing the post-conversion reconciliation in the QuickBooks Online company file. This is also important when you are using the cash accounting scheme.
Having a full bank reconciliation prior to the conversion can simplify the post-migration process because the imported accounts will appear unreconciled in QuickBooks Online after the conversion and you just have to mark all entries as ‘reconciled’ in one go.
Extract data for auditing purposes in Xero (mandatory)
Extract data from Xero and keep it in a safe location for tax auditing purposes because not all data is converted to the new system when switching between different accounting systems.
Export the following reports for all accounting periods:
- Sales Tax report
- Account Transactions (select all columns, include a date range that capture all transactional data, and remove grouping)
- Trial Balance
- Other reports that you deemed necessary
Extract data for post-conversion validation (mandatory)
Extract the following reports from Xero for the period ending at conversion date so that you can compare the data after the conversion is complete.
- Income Statement (aka Profit and Loss in QBO)
- Balance Sheet (includes Bank Account Balances)
- Trial Balance
- Aged Receivables Summary (aka Accounts Receivable Aging Summary in QBO)
- Aged Payables Summary (aka Accounts Payable Aging Summary in QBO)
- A list of Outstanding Invoices of your customers and vendors
- Only needed if either of the Aged Summary reports do not tie out.
Other pre-conversion notes (optional)
- Cleaning up your account or account codes in Xero prior to the conversion will ensure that there is no unneeded data carried over to QuickBooks Online.
- The suspense account in Xero is used for transactions that can't be determined where they belong. They should be classified to the right accounts after the conversion.
- We advise you to match all your outstanding payments/sales on accounts to their respective invoices in Xero. Otherwise, they will be brought over as journal entries to close the conversion, and require you to manually match them post-conversion.
- Your historical A/P and A/R might not be accurate when unmatched payment entries are brought over as journal entries. The same goes for credit memos; apply these to the corresponding invoices to get a better quality conversion.
- If you use Cash-based accounting, we advise you to migrate directly after the close and reconciliation of a tax period. Otherwise, the post-conversion work in QuickBooks Online can be a lot of work.
- We strongly suggest you to do your first tax report for the remaining tax period based on the old data in Xero. Suppose we post our tax report every quarter (ending in March) to the tax agency and we are converting on April 14, this means we are converting in the middle of a tax period. You need to do a tax report for the period April 1 until April 14 in Xero. After the conversion, we will use this information to make a full report by adding the amounts in the boxes together (from Xero and QuickBooks Online files).
Step 3: Get started converting your data to QuickBooks Online
- Follow the step by step guidance in the wizard to select your migration options.
- Connect to your Xero account (your old source) and select the right company.
- Connect to your QuickBooks Online account (your new destination).
- Follow the conversion process and wait for it to complete.
- You will receive an email notification when the conversion is complete.
Step 4: Post-conversion checklist for QuickBooks Online
After your conversion has completed, follow some essential steps to verify your data in QuickBooks Online.
Verify the converted data
- Double check your conversion in QuickBooks Online using these reports
- Profit and Loss
- Balance Sheet
- Trial Balance
- Accounts Receivable Aging Summary
- Accounts Payable Aging Summary
- Check the Dataswitcher generated report that provides a summary of the balances recorded in Xero and QuickBooks Online.
- Look up “Dataswitcher” in your Vendors list under Expenses
- Go to vendor details and open the attached document named “report.pdf”
- Open the balance sheet and trial balance per conversion date to compare the closing balances and new balances at different points in time, to make sure the balances are in order for multiple periods. Sometimes the amounts are shifted over periods, but the end balance of the conversion should be correct.
- Note that, when you are using Cash accounting, compare the trial balances as being Accrual. Dataswitcher will bring over all data correctly, however different systems might calculate expenses and income differently on different dates. That's why you might see differences in certain dates.
- Check the outstanding vendor and customer balances by selecting random customs and vendors in a given period in AP and AR Aging Summary Reports to make sure there are no discrepancies.
- Should any zCustomer or zVendor appear in the AR and AP statements, there is a high chance that the source system has set more than one A/R or A/P linked account. In QuickBooks Online, only one A/R and A/P account can be set.
- Check the system built-in accounts and remap as needed
- Dataswitcher conversion wizard uses a suspense account to book payments on and it is mostly booked to account code 1299 which is used for transferring payments (if your tier is eligible for individual payments). This suspense account should be empty at the end of the conversion. If it is not empty, you will need to map those accounts.
Set up QuickBooks Online
- Set up your starting fiscal year and month
- Go to Settings ⚙, then Account and Settings.
- Select Advanced settings.
- Set your start of the fiscal year to the correct month.
- Reconcile the migrated bank transactions
- After the conversion, the transactions on the bank accounts appear unreconciled in QuickBooks Online. We suggest you reconcile them in bulk to match the source system.
- Go to Bank Connection to reconnect your bank accounts in Quickbooks Online. Then reconcile each bank account following these steps:
- Go to Settings ⚙ and then Reconcile.
- Select Get started to continue.
- Fill in the fields and select Start reconciling.
- In Ending balance, use the ending balance of the account. (This should match the last reconciled balance in Xero, found in reports pulled during the pre-conversion checklist). The Ending date is the date of the last reconciliation performed in Xero.
- Select the transactions to reconcile. If you followed the pre-conversion checklist and reconciled your bank account fully, you can select all transactions for reconciliation. Otherwise, you might need to deselect some transactions (the ones you did not reconcile).
- To finish reconciling, select Finish now.
- Now the Quickbooks Online will track the bank transactions.
Other post-conversion tasks
The following are additional tasks you can do in QuickBooks Online if the scenario applies to you.
Change Petty Cash account in QuickBooks Online
You may change the Petty Cash account in the QuickBooks Online to be reflected as a bank account:
- Select the cash account.
- Change the account type to "Bank Account" and the account type detail to “Cash on Hand”.
- Change the Detail type to "Cash on hand" to make the account appear in your bank accounts overview on the dashboard.
Check and change your account types
Dataswitcher brings over the main types for account codes, but not the specific types (subtypes) if those exist in your source system. You are free to change the account types after the conversion to something you see better fitting.
Also in some cases, if your ranges were incorrect in the source system, we brought balance accounts over as Profit and Loss accounts. This might have affected the retained earnings of previous years.
Revalue your foreign accounts (and banks) for multi-currency transactions
If you converted from the source system that does and enabled multi-currency option, sometimes the foreign balances of the conversion line up, but the home currency amounts do not (depending on when you did your last revaluation in the source system). Here’s how you adjust this:
- Create a home currency adjustment in QuickBooks Online.
- Go to Settings ⚙, then select Currencies.
- Find the currency you want to adjust.
- Under the Actions column, select the small arrow ▼ icon.
- Select Revalue Currency.
- After saving, Quickbooks Online automatically creates a journal entry for you, so that the home currencies are correct from that point on.
Note: we might have to move some amounts from bank accounts to revaluations. This is because some data in the source systems might be corrupt. It should however not be more than a couple dollars.
Turn on sales tax
Since Dataswitcher does not convert Sales Tax to prevent differences between the conversions (and loss of information), you need to turn on Sales Tax.
- Go to Taxes.
- Select Set up Sales Tax or Get started.
- Follow the onscreen steps to finish the setup.