The financial year (or fiscal year) is the 12-month period your business uses for accounting and tax reporting purposes. It may or may not align with the calendar year.
The financial year defines the 12-month period over which your business measures its financial performance and lodges tax returns. In Australia, the standard financial year runs from 1 July to 30 June. In the UK, the tax year runs from 6 April to 5 April, though companies can choose different year-ends. In the US and Canada, most businesses use the calendar year (1 January to 31 December), but other year-ends are permitted. Choosing the right financial year-end can have practical benefits - for example, a seasonal business might choose a year-end that falls during its quieter period, making the end-of-year accounting process easier. The financial year determines when your annual tax return is due, when financial statements are prepared and when many compliance obligations fall. SortBooks tracks your financial year settings in Xero and generates period-accurate reports, whether you need monthly, quarterly or annual financial summaries.
SortBooks helps with the bookkeeping behind financial year by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing financial year by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
A tax return is the formal document lodged with your tax authority reporting your income, deductions and tax payable for a specific period, usually annually.
Financial statements are formal reports that summarise your business's financial position and performance. The three core statements are the profit and loss, balance sheet and cash flow statement.
In bookkeeping, compliance refers to meeting all legal and regulatory requirements for financial record keeping, tax reporting and lodgement obligations set by your tax authority.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.