Set up your organisation's financial details
Your financial settings include information used to produce your reports, invoices and bills.
The financial information you're asked to provide is used in the production of financial reports and print versions of invoices, bills and credit notes so for these to generate accurately you will need to enter the information asked for on this screen. If you are unsure about the financial information asked for, you might like to wait until you have consulted your accountant or bookkeeper.
Choose your financial year-end
Xero sets a default financial year-end for your organisation: June for a financial year that runs from 1 July to 30 June.
Most organisations set their financial year-end to align with their tax year-end.
Changing your financial year-end date impacts your balances, reports and fixed assets. Avoid changing it if you’ve already set Xero up for your organisation and entered your conversion and comparative balances.
- From the Settings menu, select General Settings.
- Under Organisation, click Financial Settings.
Under Financial Year End, click Change.
- Choose your financial year-end date.
- Click Done.
Use lock dates to close off your accounts for a period or year end
Lock dates stop any changes to data entered before that date. Only users with the Adviser user role can view, set and change lock dates.
Activity statement settings
When you first create an organisation some of these settings are set by default, others you will need to complete.
If you are registered for GST, this information will be on your activity statement or other income tax material you have from the Australian Tax Office (ATO). Choose from the options in Xero to match your registration - depending on your organisation you may need to complete some or all fields.
GST Accounting Method – choose Accruals or Cash basis depending on your organisation’s GST registration - this field is mandatory. This is set to Accruals by default. Your choice will determine which transaction dates are included in the date range you run your Activity Statements report for.
- If you choose Cash basis: the Activity Statement will be run based on the date you made or received payments for invoices, bills and expense claims and the date you entered spend or receive money transactions in your bank account.
If you choose Accruals basis: the Activity Statement will be run based on the invoice date or in the case of expense claims the 'Reporting date'. All other reports in Xero are based on the actual transaction date. For example, spend or receive money date, invoice date, expense claims reporting date. If your company is not registered for GST choose 'None'.
Only change this status if you fully understand the necessary GST requirement for all accounts within the chart of accounts.
- Tax file number - enter your organisation's TFN.
- GST Calculation - choose the frequency with which you submit your Business Activity Statement (BAS). Xero will automatically display it at these times with the GST amount to pay already filled in based on this period. You need to choose an option in order for Xero to generate a BAS.
- PAYG Withheld Period - this will determine the frequency that Xero presents an Instalment Activity Statement (IAS) or displays PAYG tax withheld boxes on the BAS. You need to choose a period in order for Xero to generate an IAS.
- PAYG Income Tax Method - this will determine the fields you need to complete on the BAS or IAS for your income tax instalment.
- Fringe Benefits Tax, Fuel Tax Credits and Wine Equalisation Tax - select the check box if relevant to your business.
Once you have specified these options, Xero will automatically generate either a BAS or an IAS.
You'll need to complete the Activity Statement information here. It needs to match the Activity Statement form you've received from the ATO. Make sure you complete the Activity Statement settings before you rely on any of the GST-based reports.
Activity statement types and settings
The activity statement that Xero generates for the ATO is based on your GST and PAYGW reporting frequency. For example:
- Monthly PAYGW but quarterly GST – Xero generates an IAS for the first and second month of the quarter, and a BAS for the last month
- Monthly PAYGW and GST – Xero generates a BAS for each month
Time zone setting in Xero
The time zone setting in Xero determines the date and time shown for those items that are time-tracked. For example, when a user logs in. Xero also uses the time zone setting for time-stamping all actions recorded in History & Notes.
Xero uses your computer's clock to determine what the current date is when entering any transactions or running reports that default to today's date. For example, entering the date on an invoice, or running the Balance Sheet report as at today's date.
The time zone is set for Australia by default but you can change it.