Why this matters
Organization settings are the foundation every report, invoice, and tax filing sits on. The wrong legal name on invoices, wrong financial year end, or wrong sales tax basis means reprinted documents and misleading reports. These details are easy to set correctly on day one and 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 your business's reporting year, which is the calendar year for most small businesses
- The Sales Tax Basis field matches how you file sales tax, 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 is December 31.
- Choose the Sales Tax Basis field, cash or accrual, to match the applicable sales tax reporting method, and confirm it with your accountant. This field is separate from the accounting basis used for financial reports and your IRS accounting method.
- 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 do not match contracts
- Guessing the sales tax basis and filing sales tax on a different basis from the setting
- Leaving the financial year default unchecked and getting reports that are off by one month
Real world examples
- Cash versus accrual is a standard first question accountants ask new Xero clients. The basis selected for a financial report drives what that report shows, while the Sales Tax Basis field concerns sales tax reporting.
- Xero applies financial year settings to reporting periods and comparative reports, so an incorrect year end distorts every "this year versus 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 Sales Tax Basis all match the applicable records and filings.
