Looking to Convert Xero to QuickBooks? This is the Perfect Guide for It

QuickBooks is an accounting and bookkeeping software preferred by many small to mid-sized businesses as it is more efficient and scalable than other similar products on the market. Xero is one such contender of QuickBooks in the accounting software range. It also has cloud-based operations like QuickBooks Online. However, if you’re looking to convert Xero to QuickBooks, you’ve arrived at the right place. In this blog, we’ll cover how you can migrate from Xero to QuickBooks in no time!

Convert Xero to QuickBooks – A Quick View Table

Given in the table below is a concise summary of this blog on the topic of migrating from Xero to QB Online:

Description	You can convert from Xero to QuickBooks Online in order to avail the wide variety of features present in QuickBooks, which amounts to greater scalability. This can boost your workflow and have a positive impact on your business processes.
What converts	1. Opening balances 2. Invoices and credits (AR) 3. Bills and credits (AP) 4. Bank account transactions 1. Spend money 2. Receive money 3. Transfers 5. Matched payments (AR and AP) 6. Lists 4. Chart of Accounts 5. Customers list 6. Vendor’s list 7. Inventory Items list, like: 1. Name 2. Description 3. Cost – Sales price/rate 8. Non-Inventory item 9. sItem Sales Tax 10. Tracking categories 7. Transactions
What doesn’t convert	1. Assembly builds 2. Unposted journals 3. Jobs 1. Which are not attached to any transactions 4. Budgets 5. Memorized transactions 6. Deleted transactions 7. The history of your bank reconciliation 8. Partially closed or closed purchase orders and estimates 9. File attachments 10. Employees list 11. Invoice template and other templates 12. Terms list
Steps to convert	Follow the wizard’s steps on your screen to select your migration options Connect to your Xero account (your old accounting app)Then, proceed to choose the right company file from which the data would be migrated Connect to the QBO account (your new accounting app)Follow the conversion process Wait for the migration procedure to end You will receive an email when the Xero to QB migration procedure is over

Some Prerequisites for Switching From Xero to QuickBooks Online

Listed below are some requirements that you need to fulfill before you convert from Xero to QuickBooks Online:

1. You must be using Xero on a US account
2. You should have a paid subscription for QuickBooks Online USA
3. Ensure that you have a QBO plan that supports the features you need to convert your accounting and bookkeeping data successfully:
   • If your chart of accounts has more than 250 accounts in Xero, you need QB Online Advanced
   • If you have classes, you need QuickBooks Online Plus or QuickBooks Online Advanced. If you have more than 40 classes, you need QuickBooks Online Advanced
   • If you need an inventory, you should opt for QuickBooks Online Plus or QuickBooks Online Advanced
   • If you want to manage bills, you can do so with QuickBooks Online Essentials, Plus, or QuickBooks Online Advanced
4. Your permissions level for Xero US should be standard or advisor role
5. You would need the company admin permissions in QuickBooks Online

Now how to convert from Xero to QuickBooks, let us see the steps to do so.

Guided Steps to Convert from Xero to QuickBooks Online

Given below are the steps you need to convert from Xero to QuickBooks Online:

Step 1: Pre-Conversion Preparation for QuickBooks Online

Ensure that your company file in QuickBooks Online is blank. However, you can have company details, users, and settings permissions. Make sure the company in QB doesn’t have any prior transactions or a customized Chart of Accounts, as when you convert Xero to QuickBooks, you can overwrite the data.

1. If the QB Online company file you would be migrating to does have financial transactions or a customized chart of accounts, you should clear the company file data in QBO and follow these steps:
   • Confirm the home currency
   • Turn off the taxes
   • Turn on locations and tracking classes only if you are converting classes
     • Turn on per line item (default setting)

Step 2: Pre-Conversion Preparation for Xero

Follow the steps given below so that you have a smooth conversion from Xero to QuickBooks Online:

Reconcile the Accounts in Xero

You should reconcile your bank accounts in Xero so they transfer cleanly to QBO. After you reconcile the accounts, you should note down the bank account balances. You will be needing this information when preparing the post-conversion reconciliation in the QBO company file. If you’re using the cash accounting scheme, it is also important there. Having a full bank reconciliation before you convert Xero to QuickBooks Online can help make the post-migration process less-complex because the imported accounts will appear unreconciled in QBO after the conversion. You can just mark all entries as reconciled in one go and make the process simpler.

Extract Data for the Purpose of Auditing in Xero

Extract data from Xero and store it in a safe location for tax auditing, as not all data is migrated when switching between accounting systems. You should export the reports given below for all accounting periods:

1. Sales Tax report
2. Account Transactions
   • Select all columns
   • Include a date range that contains all transactional data, and remove grouping
3. Trial Balance
4. Other reports that you think are necessary

Extract Your Data for Post-Conversion Validation

You should run the following reports in Xero for the period ending at the conversion date so that you can tally the data after you have converted your data to QB Online:

1. Income Statement
   • Profit and Loss in QuickBooks Online
2. Balance Sheet
   • includes Bank Account Balances
3. Trial Balance
4. Aged Receivables Summary
   • Accounts Receivable Aging Summary in QuickBooks Online
5. Aged Payables Summary
   • Accounts Payable Aging Summary in QuickBooks Online
6. A list of Outstanding Invoices of the vendors and customers
   • This is only needed if either of your Aged Summary reports does not tie out.

Things to Keep in Mind Pre-Conversion

1. You should clean up your Xero account or account codes before you convert Xero to QuickBooks Online to make sure that unnecessary data is not brought over to QBO.
2. The transactions that can’t be assigned to a specific account are assigned to the suspense account in Xero. They should be classified in the right accounts after the conversion.
3. It is advised that you should match all the outstanding sales and/or payments on accounts to their invoices in Xero. If not done, they will be recorded as journal entries to close the conversion, requiring you to match them manually after your migration procedure is over.
4. Your historical A/P and A/R might not match when the unmatched payment entries are imported as journal entries. The same goes for credit memos; apply them to the corresponding invoices to improve conversion quality.
5. If you use Cash-based accounting, QB advises you to migrate directly after the close and reconciliation of a tax period.
6. It is suggested by QB that you prepare your first tax report for the remaining tax period using the old data in Xero.

Step 3: Get Started With Data Conversion

1. Follow the wizard’s steps on your screen to select your migration options
2. Connect to your Xero account (your old accounting app)
3. Then, proceed to choose the right company file from which the data would be migrated
4. Connect to the QB Online account (your new accounting app)
5. Follow the conversion process
6. Wait for the process to complete
7. You will receive an email when the data is successfully converted from Xero to QuickBooks

Step 4: Things to Do After Conversion

Given below is the list of things you should do after you successfully convert your data from Xero to QuickBooks Online:

Verify the Data You Converted

1. Double-check your conversion in QuickBooks Online using the following reports:
   • Profit and Loss
   • Balance Sheet
   • Trial Balance
   • Accounts Receivable Aging Summary
   • Accounts Payable Aging Summary
2. Check the Dataswitcher-generated report, which includes the balances recorded in Xero and QB Online’s summary:
   • Search for Dataswitcher in the Vendors list
     • Under Expenses
   • Navigate to vendor details
   • Then, open the attached document named report.pdf
3. Open the balance sheet and trial balance on the date you converted so that you can compare the new balances and the balances at different points in time, ensuring the balances are in order across multiple periods. However, sometimes you can find that the amounts might have shifted over different periods, but the end balance of the conversion should still be right.
   • Note that when you are using Cash accounting, compare the trial balances with those of Accrual accounting. Dataswitcher will transfer all data accurately; however, different systems might calculate income and expenses in a different way on various dates. This is precisely why you can see a difference in certain dates.
4. Check outstanding vendor and customer balances by selecting random customers and vendors in a given period in the AP and AR Aging Summary Reports to ensure there are no discrepancies.
   • If any Customer or Vendor appears in the AR and AP statements, it is likely due to the fact that the source system has linked more than one A/R or A/P account. In QB Online, you can only set one A/R and one A/P account.
5. The built-in system accounts should be checked and remapped as needed.
   • The Dataswitcher conversion wizard payments are booked on a suspense account., It is generally booked to the account code 1299, which is used for transferring payments, only if your tier is eligible for individual payments. This suspense account, at the end of the conversion, should be empty. If it is not empty, you will need to map those accounts.

Set Up Your QuickBooks Online

1. Set up the starting fiscal year and month
   • Navigate to Settings in QuickBooks Online
   • Click on Account and Settings
   • Select the Advanced settings option
   • Set up the start of the fiscal year to the right month
2. Then, you should reconcile the bank transactions that have been migrated
   • The transactions on the bank accounts in QBO would appear as unreconciled after the migration
   • In order to match the source system, you should reconcile them in bulk
   • Navigate to Bank Connection to reconnect the bank accounts in QBO
   • Then, proceed to reconcile each bank account with the steps given below:
     • Go to Settings in QB Online
     • Click on the Reconcile option
     • Then, proceed to click on Get Started
     • Feed in the fields
     • Click on Start reconciling
     • In the Ending balance, use the account’s ending balance
       • This should match with the last reconciled balance in Xero, found in the reports you made during the pre-conversion procedure
       • The Ending date is the date of the previous reconciliation performed in Xero
     • Select the transactions to reconcile. If you followed the pre-conversion checklist and fully reconciled your bank account, you can select all transactions for reconciliation. Otherwise, you should proceed to deselect some transactions (the ones you did not reconcile).
     • To finish reconciling, select Finish now.
   • Now, QuickBooks Online will track the bank transactions.

Additional Post-Conversion Steps

The following are additional tasks you can do after you convert Xero to QuickBooks if the scenario applies to you:

Change Petty Cash account in QuickBooks Online

You can change the Petty Cash account in QuickBooks Online to be shown as a bank account with the steps given below:

1. Select the cash account
2. Change the account type to Bank Account
3. Change to Cash on Hand in the account type detail
4. Change the Detail type to Cash on hand
5. This would make the account appear in your bank accounts overview on the dashboard

Check and Change the Account Types

Dataswitcher migrates the main types for account codes, but not the specific types if those exist in your Xero data file. You are free to change the account types after the conversion to something you consider a better fit. Additionally, in certain scenarios, if your ranges were incorrect in the Xero data file, the Dataswitcher might have brought balance accounts over as Profit and Loss accounts. This can affect the retained earnings of previous years.

Check the Foreign Accounts for Multi-Currency Transactions

If you converted from the Xero company file that had enabled the multi-currency option, sometimes the conversion lines up the foreign balances, but doesn’t line up the home currency amounts. This depends on when you last revalued in the Xero file. You can adjust this by following these steps:

1. Create a home currency adjustment in QuickBooks Online
   • Go to Settings in QBO
   • Click on Currencies
   • Find the currency you wish to adjust
   • Go to the Actions column
   • Click on the arrow icon to open the dropdown menu
   • Select Revalue Currency
2. After you save it, the QBO website will automatically create a journal entry for you to ensure that the home currencies are correct

Turn On Sales Tax

Since Dataswitcher does not convert Sales Tax, you have to turn on sales tax manually with the steps given below:

1. Click on Set up Sales Tax in QBO
   • Or Get started
2. Follow the steps you see on your screen to complete the setup

This was all you needed to know to transfer from Xero to QuickBooks. Now, let us discuss what would migrate and what won’t be migrated.

Learn What Migrates from Xero & What Doesn’t – A Data Guide

Now, let us discuss what data you can convert from Xero to QuickBooks Online, and what data you can’t convert.

What Would be Converted

You can convert the following data up to 2 fiscal years from Xero to QuickBooks Online without any extra charges:

1. Opening balances
2. Invoices and credits (AR)
3. Bills and credits (AP)
4. Bank account transactions
   • Spend money
   • Receive money
   • Transfers
5. Matched payments (AR and AP)
6. Lists
   • Chart of Accounts
   • Customers list
   • Vendors list
   • Inventory Items list, like:
     • Name
     • Description
     • Cost – Sales price/rate
   • Non-Inventory items
   • Item Sales Tax
   • Tracking categories
7. Transactions
   • Invoices
   • Customer payments
   • Credit memo
   • Sales receipts
   • Bills
   • Vendor payments
   • Vendor credits
   • Checks
   • Journal entries
   • Item receipts
   • Inventory adjustments
   • Liability adjustments
   • Sales tax payments
   • Transfers

Data that Won’t be converted

Given below is the list of data that won’t be converted when you transfer from Xero to QuickBooks Online:

1. Assembly builds
2. Unposted journals
3. Jobs
   • Which are not attached to any transactions
4. Budgets
5. Memorized transactions
6. Deleted transactions
7. The history of your bank reconciliation
8. Partially closed or closed purchase orders and estimates
9. File attachments
10. Employees list
11. Invoice template and other templates
12. Terms list
13. Payroll information like:
    • Employee details
    • Pay calendars
    • Tax information
    • Pension
14. Project details like:
    • Quotes and estimates
    • Tasks and expenses
    • Profitability
15. Fixed assets management

Limitations of Conversion

Because different accounting software have different procedures as to how they handle accounting, it is not always possible to convert everything for your entire accounting period, and some info is bound to be left out. Hence, you need to understand some of the limitations when you convert Xero to QuickBooks.

Customized Chart of Accounts

Certain system accounts, such as the following: 

1. Retained Earnings
2. Accounts Receivable
3. Accounts Payable

These renamed or customized accounts in Xero may be converted to suspense accounts that appear as Customers or Vendors in QuickBooks Online. You always have the option to remap them later. However, the normal balance sheet accounts which have been renamed in Xero would have no such effects.

Multiple Currency Transactions

Transactions in currencies other than the home currency in Xero will be converted to the home currency that you set up in QuickBooks Online. For example, if you have transactions in euros in Xero and you set your home currency as US dollars in QuickBooks Online, all transactions will be converted to USD using the Xero exchange rates. For your customers and vendors, there will be no unrealized foreign currency gains or losses. Rounding differences from conversions will be reflected as a P&L item in QuickBooks Online.

Journals

The journals for Credits, Prepayments, and Overpayments in Xero will be merged to maintain an accurate balance across all accounts when you migrate your accounting and bookkeeping data to QuickBooks Online.

Tracking Options and Categories

Classes and Locations in QuickBooks Online are what Tracking categories and options in Xero become after you migrate. However, you can only assign one Department/Location for a transaction in QBO. When converting to location, if you have transactions with multiple options per line item in Xero, the line item 1 of those options applies to all line items, since only a single location for a transaction is allowed in QB.

AP and AR Transactions

When the Accounts Receivable and Accounts Payable Aging balances differ from the AR/AP GL balances, the discrepancy would be transferred to Customers or Vendors in QuickBooks Online.

Sales Tax

The sales tax in Xero is converted as the line item in QBO. The sales tax items are converted, too, when moving from Xero to QBO. Though the default sales tax codes that you might have assigned to customers in Xero are not converted to QB Online.

Conclusion

You can convert Xero to QuickBooks Online in order to avail a wide variety of solutions that are more scalable and cost-effective to manage your business needs. This can boost your workflow and business processes. We have covered the steps you can use to migrate from Xero to QuickBooks, along with a guide on what moves and what doesn’t.

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