The steps of a QuickBooks Online to Xero migration in Australia, and where it gets complicated: classes and locations, tax codes, undeposited funds and payroll.
Who this is for
Business owners, bookkeepers and finance managers planning to move from QuickBooks Online to Xero in Australia.
Question this answers
What are the steps of a QuickBooks to Xero migration, and where does it usually go wrong?
What you'll leave with
A QuickBooks to Xero migration follows the same path every time: choose the conversion date, tidy the QuickBooks file, map the chart of accounts, the tax codes and the classes and locations, decide how much history to bring, move the balances and open items, then check Xero against QuickBooks before you switch. The move itself is the quick part. The time goes into the decisions and the checking.
QuickBooks Online and Xero are both cloud accounting systems, so the move looks simple. It mostly is. The places it goes wrong are the features that work differently in the two systems: classes and locations, tax codes that do not land on the right BAS labels, money left sitting in Undeposited Funds, inventory costing, foreign currency and payroll moved mid-year. This guide walks through each of them so you know where to look.
This guide is about QuickBooks Online. QuickBooks desktop software has not been sold in Australia under the QuickBooks name since 2014. The Australian desktop line became Reckon Accounts, so if you are on an old desktop file, our Reckon to Xero guide is the closer match.
Here is the order a QuickBooks to Xero migration has to follow. Skipping ahead, for example connecting bank feeds before the accounts are mapped, creates rework later.
Many Australian QuickBooks files use classes and locations to report by department, branch, store or job. Xero does the same job with tracking categories, but the rules are different.
Here is what getting it wrong looks like. A retailer with four stores tracks them as locations in QuickBooks and uses classes for product lines. The conversion maps classes into Xero but leaves locations behind. The balances agree to the cent, so nobody notices. Three months later the owner asks for profit by store, and there is no store on any transaction since the move.
Tax codes are the part of a migration most likely to be wrong without anybody seeing it. A wrongly mapped code raises no error. The invoices look fine. The BAS is simply wrong, every quarter, until somebody checks.
Match by BAS label, not by name. QuickBooks Online and Xero both have Australian GST codes, but they are named differently. Each QuickBooks code has to map to a Xero rate that reports to the same labels. Check that capital purchases still land in G10, other purchases in G11, exports in G2 and other GST-free sales in G3.
Simpler BAS hides the detail. New QuickBooks Online files default to Simpler BAS, which reports only G1, 1A and 1B, using just three codes: GST, GST Free and Out of Scope. Those codes do not record whether a purchase was capital or whether a sale was an export, so that detail may not exist in the file at all. If you move to full BAS reporting in Xero, or the business grows past the Simpler BAS threshold, those old codes start to matter.
Custom and leftover codes. Many files carry codes somebody created for a special case: imported goods under deferred GST, a private-use split, a supplier that was wrongly set up. Each needs a decision: map it to a standard Xero rate, create a matching rate in Xero, or retire it.
Files set up for another country. A QuickBooks Online file takes its country when it is created, and that cannot be changed afterwards. Occasionally an Australian business is running on a file set up for another country, often because an overseas parent created it. Those files do not have Australian GST and BAS reporting built in, so the tax mapping has to be worked out from the transactions themselves.
QuickBooks Online has an Undeposited Funds account. Customer payments sit there until they are grouped into a bank deposit, so several cheques or card settlements can be matched to one line on the bank statement. QuickBooks creates the account automatically and it cannot be deleted.
Xero has no Undeposited Funds account. Payments are matched directly against the bank statement lines. That means whatever is sitting in Undeposited Funds at the conversion date has to be dealt with before the move.
In a well kept file, the balance is small: payments received in the last day or two and not yet banked. In many files it is not. Payments that were matched to the bank feed as new deposits, instead of being matched to the payment already recorded, leave the original payment sitting in Undeposited Funds forever. Over a few years that builds into a large balance that nobody can explain, and income may be counted twice. Fix it in QuickBooks first. Carried into Xero, it becomes an unexplained asset on the balance sheet.
Inventory. QuickBooks Online Plus and Advanced track inventory using first in, first out (FIFO) costing. Xero tracked inventory uses average cost. The same stock on hand can carry a different value under each method, so the opening stock value in Xero has to be agreed with the balance sheet at the conversion date, and your accountant should know the costing method has changed. A business with several stock locations, assemblies or batch tracking usually needs an inventory app alongside Xero.
Products and services. The QuickBooks products and services list carries names, prices, income and expense accounts and tax codes. Each one needs checking against the new Xero chart of accounts and tax rates, or every invoice raised from it will post to the wrong place.
Foreign currency. Once multicurrency is turned on in QuickBooks Online, it cannot be turned off. If your file has it on, check whether it is really used. If it is, open foreign currency invoices, bills and bank accounts have to come across at the right exchange rates, and you need a Xero plan that includes multi-currency, which in Australia is the higher plans only.
In Australia, QuickBooks Payroll is powered by Employment Hero, with Single Touch Payroll (STP, the way pay is reported to the ATO each pay run) built in. Moving payroll to Xero means moving employees, pay rates, awards, super funds and leave, not just the accounts.
QuickBooks Online is one subscription per company, so a group of businesses often has several. Xero works the same way: one organisation per legal entity, each with its own ABN and its own BAS.
If you run several entities, also plan how you will report across them. Xero reports on one organisation at a time, so group or consolidated reporting needs a separate reporting tool or a reporting dashboard.
Xero subsidises an automated conversion from QuickBooks through a conversion partner, and there are QuickBooks Online conversion apps on the Xero App Store. For a simple, tidy file, that can be all you need. They move the chart of accounts, contacts, products, balances and a period of history as they are.
What an automated conversion cannot do is make the decisions in this guide. It copies the accounts you have rather than the ones you want. It moves an Undeposited Funds balance without asking why it is there. It cannot decide what to track when you have more classes than Xero allows, and it does not know about payroll you are moving mid-year. If your file is tidy, has one entity, no payroll and only standard tax codes, try it. If not, plan the decisions first, then decide who does the move.
Xero has two tracking categories with up to 100 options each, set on every line.
It usually hides a reconciliation problem that has to be fixed first.
FIFO in QuickBooks becomes average cost in Xero, and the opening value has to agree.
Year to date balances and Single Touch Payroll reporting have to be right.
Each needs a decision on whether it stays separate or merges.
Open foreign currency items need the right rates and the right Xero plan.
If any of these apply, our QuickBooks to Xero migration service covers the planning and the move at a fixed price, quoted before work starts. If MYOB suits your business better, we also handle QuickBooks to MYOB migrations, and our Xero services cover what comes after the move. We work with businesses across Australia, from Perth to Sydney, Melbourne, Brisbane and Adelaide.
A single, tidy QuickBooks Online file with no payroll can be moved in days. Most businesses take two to six weeks from the first look at the file to the first month closed in Xero, because the time goes into decisions and checking rather than the move itself. Payroll, classes and locations, inventory, foreign currency or more than one QuickBooks company each add time.
The start of a financial year (1 July) is cleanest, because the year end is closed in QuickBooks and Xero starts fresh. The start of a BAS quarter is the next best, because each activity statement then comes from one system. Moving mid-quarter works, but the first BAS has to be put together from both.
They can, but not one for one. Xero has tracking categories instead: two active at a time, each with up to 100 options. If you use both classes and locations and have fewer than 100 of each, they usually map across. If you have more, or use classes to track individual jobs, you need to decide what Xero should track before the move.
Xero has no Undeposited Funds account, so anything sitting there at the conversion date has to be dealt with. Ideally every payment that has reached the bank is deposited in QuickBooks first, so the balance left is only money genuinely not yet banked. A large, old balance in Undeposited Funds is a sign of a reconciliation problem that should be fixed before the move, not carried into Xero.
Yes, but it is the part to be most careful with. Year to date pay, tax, super and leave balances have to carry across exactly, and the change has to be reported to the ATO through Single Touch Payroll so employees do not see two income statements for the same year. If you can, change payroll at 1 July.
Both are common destinations for Australian QuickBooks users, and both handle GST, BAS and Single Touch Payroll. The right choice depends on how you track jobs, stock and payroll, and which apps you need to connect. The steps and checks in this guide apply to either, and we also move QuickBooks files to MYOB.
No. We are based in Perth and move QuickBooks files to Xero for businesses in Sydney, Melbourne, Brisbane, Adelaide, Canberra, Hobart, Darwin and regional Australia. The work is done remotely, by our own team in Australia.
Meet the person
This guide comes from real projects. If it raises a question about your own system, you can ask the founder directly.
Hello, I am Kasun, the founder of HELLO PEOPLE. My first career was in accounting, so a migration starts for me where it starts for you: with whether the numbers agree.
I have run HELLO PEOPLE from Perth since 2007. Over 100 projects sit behind it, from accounting migrations and system integrations to custom software for small and medium businesses.
I have a solid accounting and IT background, with over 20 years of business experience covering every process a business runs on: sales, marketing, service delivery, inventory and warehousing, and compliance, across many industries. I hold accounting and IT professional qualifications and an MBA in Oil and Gas, and I am currently reading for a PhD in AI at Curtin University in Western Australia, focused on retrieval-augmented generation (RAG).
Small and boutique. The person who scopes your migration is the person who moves your data, and the same person is there on cutover weekend.
No ticket queue and no account manager in between. You hear back within one business day, usually sooner.
The migration is the start, not the end. When you need the next system, integration or report, you call the same person, who already knows your business.
The same move from MYOB, including chart of accounts mapping and WET.
Moving from Reckon Accounts, the old QuickBooks desktop line in Australia, to Xero.
When the next step is Business Central or NetSuite.
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