Why this matters
Organization settings are the foundation every report, invoice, and tax filing sits on. Wrong legal name on invoices, wrong financial year end, or the wrong tax basis (cash vs. accrual) means reprinted documents and restated reports — cheap to set correctly on day one, annoying to fix after a year of transactions.
What "done" looks like
- Legal name, address, and logo match your registration documents exactly
- Financial year end matches what you told the IRS (calendar year for most small businesses)
- Sales tax basis matches how you actually file (cash or accrual)
How to do it
- Open organization settings from your org name menu in Xero.
- Enter the legal name and display name exactly as registered — this is what prints on invoices.
- Set the financial year end under Financial settings; for most US small businesses that's December 31.
- Choose your tax basis (cash or accrual) to match your election — ask your accountant if unsure; changing later muddies comparisons.
- Add logo, address, and contact details so invoices look credible from the first send.
Common mistakes
- Using a casual brand name instead of the legal name, then discovering invoices don't match contracts
- Guessing the tax basis and filing on a different one than the books report
- Leaving the financial-year default unchecked and getting off-by-a-month reports
Real-world examples
- Cash vs. accrual basis is the standard first question accountants ask new Xero clients — the setting drives what reports show, and a books-vs-filing basis mismatch is a common cleanup engagement.
- Xero applies financial-year settings to comparative reports and year-end lock dates, so an incorrect year end distorts every "this year vs. last year" view.
From a founder's point of view
Settings screens feel skippable when real work is waiting, but this one page decides what every invoice and report says for years. Fill it in like a legal document, because parts of it effectively are.
Rule of thumb
Done means your accountant could glance at Financial settings and find nothing to correct — name, year end, and tax basis all match your filings.