• Katie Bunting

Set up your organisation's financial details

In this week's blog we will be going over your companies financial settings which will enable you to produce accurate reports, invoices and bills.

NOTE: Once a Xero organisation has been set up, you can't change the base currency, but you can add a new organisation with the correct currency.

Choosing your financial year-end:

Xero runs a default year-end for your organisation: December for a financial year that runs from 1st January to 31st December.

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 so you should avoid changing it if you have already set up Xero for your organisation and entered your conversion and comparative balances.

NOTE: Changing your financial 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.

  • In the Accounting menu, select Advanced, then click Financial Settings.

  • Under Financial Year End, click Change

Choosing your sales tax settings:

Tax ID Number:

Enter this number to produce and file sales tax reports with a registration or identification number from your tax authority, or if you want to show it on your invoices and reports.

Tax ID Display Name:

If you enter a Tax ID Number, you'll need to enter a Tax ID Display Name to identify the tax number on your reports.

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:

The way Xero includes transactions in the sales tax report, based on the report's date range:

Cash Basis: You report income when you pay your supplier and you receive payment and report expenses. The report is based on the date you made or received invoice, bill and expense claim payments and the date you entered spend or receive money transactions in your bank account.

Accruals Basis: Your report income when your supplier bills you and you create the invoice and expenses. The report is based on the invoice date, or the reporting date for expense claims. 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 uses the accrual basis for your reporting (except reports run on the cash basis only), and won't calculate tax on transactions.

Use lock dates:

Lock dates stop any changes to date entered before that date. Only users with the advisor user role can view, set and change lock dates.

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 and 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 today's date.

The time zone has no default setting – you choose which time zone you'd like displayed in Xero.

Next week we will be showing you how to add a bank account on Xero.

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