Next steps after conversion to QuickBooks Online

We try to make your conversion as comprehensive as possible, aiming to save you as much time as we can. However, there are some things that we are not able to do because of limitations in the software process we use.

This means that there will be some post-conversion tasks that you will need to perform and this document is provided as a guide to completing these tasks. The post-conversion tasks should be done as soon as possible after the conversion. If you encounter problems or think something might not be right please refer to our troubleshooting page.


These are the tasks you will need to perform post-conversion:

Clean up VAT | Tidy bank reconciliations | Tidy foreign currency (if applicable) | Undeposited funds | FreeAgent corporation tax

Clean up VAT

Note that when preparing your first VAT Return in QuickBooks Online, it won’t include any unfiled “late” claims that were entered in your source software and may be incorrect if we’d had to use some workarounds. We recommend you carefully check the figures in QuickBooks Online VAT Return that contains converted transactions. If the figures provided by QuickBooks Online are different to those you need to file with HMRC you may need to adjust the VAT Return in QuickBooks Online. This should only affect VAT Returns to be submitted to HMRC that include converted transactions. Subsequent VAT Returns containing only transactions entered after the conversion should not require any manual adjustments. To read more about why VAT Returns may be different for the same period in the old and new software please click here.

File the most recent VAT period you’ve already submitted to HMRC. QuickBooks Online will then be able to recognise any future transactions entered that are dated back into historical VAT period as “late” claims. These will then automatically be included in the next VAT Return.

In order to do this make sure that MTD is not yet setup. Choose Taxes from the left column and if you see the option to setup MTD choose I don’t need MTD (you’ll be able to set it up later):

Making Tax Digital

You should then be able to select the option to Prepare return.

Prepare your return image

Edit the period and dates as necessary before clicking the arrow next to Submit to HMRC button to display and select Mark as filed. You’ll then be returned to the Taxes page this time showing the filed return as unpaid. If the VAT return indicates a refund is due, the return will show as paid.

Change the setting marked as filed

For returns where VAT is owed, select the option to Record payment and choose a bank account, date and the amount from the VAT Return.

Record your payment

Whether you owe or are owed VAT, you now need to enter a journal entry. In the top right of your browser click the + button and under Other choose Journal Entry.

You’ll then see the Journal Entry screen. Assuming the amount filed was a payment (not a refund) then post the following journal entering the amount included on your filed VAT Return. Remember to use the same bank account, amount and date you used when recording the payment above.

Journal entry screen

Save the journal entry to complete the process.

Where VAT is owed to you, the journal is slightly different as you won’t have entered as bank payment. Instead you’ll need to Debit VAT Control and Credit VAT Suspense:

VAT suspense

If you wish you can turn on MTD by clicking Edit VAT in the top right then Edit Settings

Edit VAT image

Select the slider to turn on MTD

Turn on Making Tax Digital

Tidy bank reconciliations

It’s important you don’t connect bank feeds or manually import any bank statement data for your conversion period. The steps below will ensure all the balances are correct. 
Because neither you nor your client has ever used QuickBooks Online to perform bank reconciliation, QuickBooks Online assumes that no bank transactions have been reconciled. You need to tell QuickBooks Online to mark all transactions up to the conversion date as reconciled, so it only considers future transactions for reconciling. 

From the Dashboard, under Bank accounts click the name of the bank account.

Select the bank account

You can change the bank as necessary then click Reconcile.

Reconcile Button

On the next screen click Get Started but when asked if you want to Reconcile like a pro, select the Maybe later option.

Maybe later button

A Reconcile an account will display. Complete the Ending Balance and Ending Date fields as they were on the date you converted to.

Which account are you reconciling?

Leave the rest of the form blank and select OK.

You will see a list of transactions up to the statement ending date entered on the previous step. Select the top radio button to reconcile all the listed transactions. If there are unreconciled transactions then make sure to leave them deselected.

Select all reconciliations

Select Finish Now.

It’s important to repeat this process for all bank accounts in QuickBooks Online.

Tidy foreign currency (if applicable)

The recommendations below may not always be required or optimal for your user case. Please read them carefully and consider if they are relevant to you before attempting to apply them.

All bank accounts will be in base currency so create new foreign currency bank accounts. You’ll need to have setup Multicurrency from the Advanced Settings. Once the currencies are added, add the bank account.

Add currency
Add bank

Once you have the new foreign currency account you may wish to transfer the GBP balance into the new foreign currency account. Do this by navigating to the plus (+) icon in the top right and selecting Funds Transfer. Enter the date to be the same as the “convert to” date selected for the conversion. Apply an exchange rate such that the GBP account will be emptied and the deposit in the foreign currency account will reflect the correct foreign currency amount.


If you have any outstanding foreign currency invoices or bills at your convert to date, then these will also have been converted at their GBP equivalent value. You may wish to edit (or void / delete then re-enter) these to correctly reflect the foreign currency values owed or owing. To edit them you’ll first need to create a new contact and whilst doing so choose the appropriate currency in the payment and billing tab. You can then edit the invoice or bill contact and amount to be the newly created foreign currency contact and foreign currency amount. For further details on doing this click here.

Undeposited Funds (QuickBooks Desktop)

If converting from QuickBooks Desktop an “Undeposited Funds” bank account will be created during the conversion. This will appear in addition to the system Undeposited Funds account.

Your desktop undeposited funds transactions will have been converted into this new undeposited funds bank account.

If the balance is nil this bank account it can be made inactive and ignored.

If there is a balance on this account, there will have been a balance in the undeposited funds system account in QuickBooks Desktop. In order to clear this balance, when (post-conversion) any funds relating to converted transactions are deposited in the bank, instead of depositing funds in the usual way (and specifying they are deposited from the system undeposited funds account) a transfer or journal entry should be made in QuickBooks Online. This would be a journal from the undeposited funds (bank) account to the bank account the funds are being deposited into.

Any new transactions entered in QuickBooks Online can use the system undeposited funds feature and will not be posted to the “Undeposited Funds” bank account created during the conversion. These can be handled in the normal way without any transfer journal being required.

FreeAgent corporation tax calculations

If you’re a company that converted from FreeAgent, the automatically posted journals relating to corporation tax won’t have been converted. The only one of these journals we do convert is where the year end has completed but the corporation tax payment due date is in the future.

QuickBooks Online’s opening balance journal may also need amending for any opening balance on the Corporation Tax Liability account. The Trial Balances should then agree.

Access the Corporation Tax page in FreeAgent to review the calculations of each year’s corporation tax.

Review the “liability” figure for any historical year with a payment due date in the past. The liability for each of these years should be entered in QuickBooks Online as a journal. The “Balance Owed” at the last year end before the start date of your conversion will need entering in QuickBooks Online’s opening balances. This will be covered later on.

Before creating the journals in QuickBooks Online, check that both a Corpration tax liability and a Corporation tax expense account exist in the QuickBooks Online chart of accounts. If not create them as necessary.


The example to the right shows how you could create the Corporation tax expense account although customise this as you require.

Once you have the necessary accounts, add the journal to QuickBooks Online. Choose the +New button and then select Journal entry.

The journal date in QuickBooks Online should be the same as the “Dated on” date from FreeAgent. The liability is posted to both the Corporation tax liability and Corporation tax expense accounts in QuickBooks Online.

Enter a journal in QuickBooks Online corresponding to the corporation tax liability of each historical year in FreeAgent where the “Payment due” date is in the past. Do this for each year within your conversion period. If there’s multiple journals to enter in QuickBooks Online, you may find it useful to copy one journal and amend the date and amounts as necessary.

Next, add a new journal in QuickBooks Online or amend the QuickBooks Online opening balance journal to include the opening Corporation Tax Liability balance. This balance can found in the FreeAgent Corporation Tax report. If your conversion was for the period 01/01/2019 – 31/12/2024 the “Balance Owed” at 31/12/2018 would be the correct figure.