Set up your organization's financial details

When you set up your organization in Xero, enter your organization's financial details including its year end and sales tax or tax return settings.

Your financial settings include information used to produce your reports, invoices and bills. If you're unsure about the information asked for, you might like to consult your accountant or bookkeeper.

You can also access this information outside of the Setup Guide so that you can complete or update it at any time.

Image of the financial settings fields.

Choose your financial (fiscal) year-end

Xero sets a default fiscal year-end for your organization: December for a fiscal year that runs from January 1 to December 31.

Most organizations set their fiscal year-end to align with their tax year-end.

Changing your fiscal year-end date impacts your balances, reports and fixed assets. Avoid changing it if you’ve already set Xero up for your organization and entered your conversion and comparative balances.

Changing your fiscal year-end date has considerable impact on fixed assets. If you use fixed assets in Xero, you'll need to take extra steps before changing the date.

Choose your sales tax settings

Tax ID Number - enter this number if you need to file or produce sales tax reports and have some kind of registration or identification number from your tax authority, or you need a tax reference number to display on your invoices and reports.

Tax ID Display Name - if you've used a tax ID number, this field is the 'label' or description next to the number that identifies the number on your invoices and reports. These fields are optional but if you enter a tax ID number, you'll need to enter a tax ID display name.

Tax Period - the frequency you review or submit a sales tax report. The report automatically generates the amount of tax charged or paid during the period.

Tax Basis - choose Cash or Accruals Basis, or None if sales tax doesn't apply to your organization. You need to complete this field so the Xero can generate the Sales Tax Report.

  • Cash basis. You report income when you receive payment and report expenses when you pay your supplier. The report is 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.
  • Accruals basis. You report income when you create the invoice and expenses when your supplier bills you. The report is 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.
  • None. Xero won't calculate tax on transactions. Xero will use the accrual basis for your reporting, except those reports which are run on the cash basis only.

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 to Eastern Time (US and Canada) by default but you can change it.