Things to Consider Before Converting to Xero

Are you considering converting your existing accounting software to Xero? If so, now is the perfect time to start planning. The conversion process can take hours, days or weeks depending on the size and complexity of your business and how many staff need to be trained in using Xero.  By starting the planning now, with a view to completing the conversion and training process over the coming months, you will be ready in the new financial year to confidently use Xero for your business in the new financial year.

There is a free conversion service for users of certain Reckon or MYOB products. This service takes care of a large part of the data conversion process—but there is still a lot to consider and plan for before the actual conversion. I can assist in the planning; then review and refine the setup and data, and train you in using Xero.

Although I am writing with a view to planning now for starting Xero in July, it doesn’t really matter when you convert your software. You may well start off the year with one software and convert part way through the financial year—no problem. We simply import all data for the year so you have all records for the financial year available within Xero.

Before Changing Any Software

Here are some aspects that must be considered before changing software. Don’t be fooled by some of the marketing out there—conversion is a big deal and will take time, energy and money. You want to be aware of all the factors to be taken into consideration as part of the conversion process.

Accounting Matters

  • Chart of accounts—are there redundant or duplicate accounts listed? Are you sure the balances correct? Account balances may need to be updated by your tax agent before conversion.
  • Check your accounts payable—are the bills correct? Are there unapplied credits? Are there duplicates? Is the supplier information current and correct?
  • Check your accounts receivable—is it a correct list? Are there outstanding credits? Are there invoices that have been paid for but have not had payments applied?
  • Employees should be up to date—archive terminated employees. Make sure you have all details recorded according to Fair Work Ombudsman requirements.
  • Are the balances of your liabilities correct? Does the GST and PAYGW owing match what is in the ATO records? Have you entered in amounts owing to the ATO from prior periods? Is your superannuation payable correct?
  • Do you use multiple currencies? If so, we can set up as many as required. The more currencies and bank accounts used, the more involved the conversion process can be.

Business Matters

  • What is the motivation or need driving the conversion? If your current software does everything you need, then ask why you would go to the time, energy and expense of converting.
  • If your current software does not do everything you want, make a list of the things you want and need for the business. Be specific.
  • Consider any functions of your current software that you may lose by converting. Are they important for your business processes? Do you need an add-on solution to fulfil that gap?
  • Consider new functions that you will gain by converting. Will they benefit your business in practical terms?
  • Assess whether an industry specific add-on solution is required and make sure it integrates with Xero, or assess whether another solution is better for you after moving to Xero.
  • Consider how much data needs to be converted. For example, you may decide to start a new Xero file from 1 July, and leave previous historical records in your previous software. Or, you may want the historical data available within the new Xero file.
  • Analyse your inventory list if using inventory—are all the items current and correct?
  • Contacts—is your contacts list up to date? Before exporting or converting the contacts, delete any old contacts.
  • Invoice design—Xero has limitations to the ability to customise invoices, however I would work with you to design a default invoice template that you are happy with.
  • Default email messages—there are various emails that can be sent from within Xero and these can be customised and saved as defaults for efficient communications.
  • Tracking categories—do you need to track and report on different areas of the business? This would be discussed at the time of conversion.
  • Is this a good time to update or change your terms of service and payment?
  • Consider who needs access to what—Xero allows different levels of user permissions. For example, you may want salespeople to have access to all sales related information but no payroll information.
  • For larger or more complex businesses, be aware that it may be necessary to run both accounting platforms side by side for a period of weeks or months as the conversion process is completed. This allows staff to continue using the systems they know in order to run the business, while learning the new systems and gradually implementing changes with minimal stress and disruption.

Priorities for Training During and After Converting to Xero

These priorities will differ according to different business types and the needs of the individual owners or managers. This list is a rough guide to give you some things to think about in regard to planning time for training. These aspects of learning to use Xero can be done in modules over time, or learned quickly in a business blitz. Either way I would support your staff in their training needs.

  • Sales! The first thing you will need to know how to run is your invoicing. You do not want your sales processes to be interrupted by a change in software.
  • Small businesses will generally be paying weekly or fortnightly payroll and it will be a priority to train payroll staff in correct use of payroll functions.
  • If you have not previously been using batch payments for upload to your bank, now is the time to update processes for accounts payable and adopt secure and efficient practices.
  • You will need to know how to allocate transactions and reconcile accounts.
  • Activity statements. If you use an external BAS agent such as myself, you will not need to know the activity statement process. However, if you want to do this yourself, it will require substantial training in all the aspects of checking, reviewing and correcting BAS/IAS related information.
  • Once the conversion is complete and you have learned as much as you need to know in other aspects of using Xero, we would then look at what reports you need and make sure you know how to access them.


If you are interested to discuss whether converting to Xero is right for you, call me for a complimentary 15 minute chat. If it’s the right business decision then plan now to start the new financial year with current technology designed to make your business accounts easy and enjoyable.

Once we discuss your current business and the scope of the conversion, I will supply a quote and estimated time frame for the whole process.

More about Xero online accounting software and personalised Xero training.

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