Maree Maxfield recently highlighted the fact that Xero is not able to handle organisations with a year-end date that does not also fall on a month-end date. So 31st March works fine - but if your business makes up its accounts to 15th March every year, you have a problem.
However, I don't think it's a problem that Xero need to solve - I believe that sometimes you have to change to fit the software, rather than software always needing to be infinitely flexible.
In my accountancy practice we had around 200 businesses we prepared year end accounts for and NONE of them had year-end dates falling mid-month. This was mainly because we were involved with most of the businesses when they were set up and were able to influence the founders to make a sensible choice of date.
Mine was a relatively new practice (not traceable back to the19th century like many) with relatively new clients but I would be amazed if, even in older firms, there were a large percentage of clients with mid-month year-ends. It is likely then that we are talking about an issue that only affects a very small number of businesses.
There are sound reasons for businesses to change over to a month-end reporting date: this will allow tie-in with VAT/GST/Sales Tax return periods and is generally more compatible with reporting needs for other, non-financial areas of the business.
I recognise that 5th April is a very common reporting date in the UK (as it's also the end of the tax year) but HMRC have long accepted that 31st March can be used as a proxy date for 5th April.
The problem with software trying to be all things to all people is that it gets bloated, and creates complexity by offering a myriad of additional options; options that are irrelevant to the vast majority of users.
I understand that when you discover a great new tool like Xero there is an urge to have it fit existing working practices perfectly but I think you should be careful what you wish for.
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