We were recently asked about the legal requirements for the retention of financial records when an organisation winds up. Our basic understanding is that these records must be retained for 7 years. This in itself brings certain problems and potential liability for officer holders. The enquirer then asked specifically about what to do with Xero records and how to capture them.
As this conundrum will be faced by many societies winding up rather than re-registering, we put the question to an AI programme. As with all AI-generated output this information must be used with care, and independently checked, but given the proximity of the 5 April deadline, we are publishing it “as is” (with the caveat that we have not independently checked it) in the hope that it is useful. We’ve included a checklist from a subsequent query.
Answer: You can export and store your Xero data electronically, and you’ll generally need to keep the financial records for at least 7 years after the end of the relevant income year, even after the society is wound up.[1][2][3][4]
1. What to do with Xero when winding up
In practice you want to ensure you can still access full transaction history, invoices, and reports once the Xero subscription is cancelled.
Typical steps:
- Before cancelling, export key reports for the final accounting period and at least the prior 6 completed periods (to give you 7 years on hand): General Ledger, Profit & Loss, Balance Sheet, Trial Balance, Accounts Receivable/Payable listings, Bank Reconciliation summaries.[2][3]
- Export supporting lists and data where useful (contact list, fixed asset register, chart of accounts, tracking categories).[2]
- Download copies (PDF or similar) of any invoices or bills stored only in Xero if you don’t also file them elsewhere.[3][2]
If you plan to keep the Xero org open in a “read‑only” fashion (for example, by downgrading to a cheaper plan), you could rely on Xero as your electronic record storage; but if you are going to fully cancel, you must have exported copies first.[5][4]
2. How to capture and store Xero records
Xero itself allows export in a mix of PDF, Excel and CSV formats, which Inland Revenue accepts as “business records” if they are accessible and readable for the retention period.[4]
Practical approach:
- Save all exported reports and data into a clearly labelled folder structure (e.g. “Society Name – Financial Records – 20XX–20YY”).[3][4]
- Keep backups: store in at least two locations, such as an external hard drive plus a reputable cloud storage service with NZ or approved offshore hosting.[5][4]
- Ensure at least one officer, liquidator, or nominated custodian (and ideally your professional adviser) knows where the files are and can access them.[6][7]
IRD’s guidance on electronic record retention focuses on being able to produce readable copies on request; Xero (and exported files from it) is explicitly acceptable as cloud/electronic storage.[8][4][5]
3. How long you must keep them
There are two overlapping regimes: Inland Revenue tax-record rules and the Incorporated Societies requirements for accounting records.
- Inland Revenue requires New Zealand businesses (including not‑for‑profit bodies) to keep tax and business records for at least 7 years from the later of the date they were created or the date of the transaction.[4][3]
- Incorporated societies must keep accounting records for the current accounting period and the last 7 completed accounting periods.[1][2]
When the society is wound up and removed from the register, those obligations don’t disappear immediately; the liquidator or those responsible for the winding‑up effectively step into the society’s shoes as record‑keepers for that period.[9][10][6]
In practice, if you keep all Xero-derived accounting records and supporting documents for 7 years after the final balance date / income year, you will meet both IRD and incorporated society expectations in most typical cases.[1][2][3][4]
4. Who should hold the records
Your constitution or winding‑up resolution can specify where and with whom records will be held, but even if it doesn’t, best practice is:[7][6]
- Nominate a custodian – often the final treasurer, secretary, or an external accountant – who agrees in writing to hold the records for the retention period.[7][9]
- Record this decision in the final committee or general meeting minutes, including where the electronic files and any paper files are stored.[2][1]
- https://is-register.companiesoffice.govt.nz/help-centre/running-your-incorporated-society/records-you-should-keep/
- https://community.net.nz/resources/nz-navigator-trust/what-information-incorporated-societies-should-keep
- https://www.myob.com/nz/resources/guides/accounting/business-record-keeping
- https://www.taxtechnical.ird.govt.nz/standard-practice-statements/general/sps-1301-retention-of-business-records-in-electronic-format-application-to-store-records-offshore-an
- https://www.nbr.co.nz/xero-finally-gains-ird-approval-to-keep-its-customers-records-in-the-cloud/
- https://is-register.companiesoffice.govt.nz/help-centre/ending-an-incorporated-society/
- https://www.workingforworkers.org.nz/incorporated-societies-advice/how-is-an-incorporated-society-closed-down-or-wound-up%3F
- https://www.taxtechnical.ird.govt.nz/-/media/project/ir/tt/pdfs/standard-practice-statements/general/sps-21-02.pdf?modified=20210506215836
- https://communitytoolkit.org.nz/choosing-the-right-legal-structure-for-your-group/incorporated-societies/
- https://www.legislation.govt.nz/act/public/2022/0012/latest/whole.html
- https://www.xrb.govt.nz/standards/accounting-standards/incorporated-societies/
- https://is-register.companiesoffice.govt.nz/help-centre/running-your-incorporated-society/
- https://is-register.companiesoffice.govt.nz/help-centre/keeping-society-details-up-to-date/
- https://igs.nz/insights/2025/02/new-rules-for-winding-up-of-incorporated-societies/
- https://sweetadelines.co.nz/system/files/attachments/2404/Incorporated Society Guidance for SANZ Choruses.pdf
Here is a concise “final month in Xero” wind‑up checklist you can adapt to your society.
- Confirm the final balance date for the society (e.g. date of cessation or liquidation).[3][6]
- Decide which accounting periods you will keep in your archive (at least current year plus previous 6 completed years).[2][4][1]
- Note who is responsible for the wind‑up in Xero (treasurer, accountant, liquidator).[7][3]
2. Final tidy‑up in Xero
- Reconcile all bank accounts to the final date; ensure no unreconciled statement lines remain.[4][2]
- Clear suspense/holding accounts where possible and document any remaining balances.[2]
- Finalise any draft invoices, bills or expense claims up to the final date.[4][2]
- Check contact list for duplicates or obvious errors, so reports are clean.[2]
3. Export core accounting reports
For the final period and at least the previous 6 full years (if Xero holds that much):
- Profit & Loss (for each year) in PDF and Excel/CSV.[1][4][2]
- Balance Sheet (for each year) in PDF and Excel/CSV.[1][4][2]
- Trial Balance (for each year).[1][2]
- General Ledger detail for each financial year (you may need to export by date range or by account).[4][2]
- Aged Receivables and Aged Payables at the final date (even if zero, to show nothing outstanding).[2][4]
- Bank Reconciliation reports or “Bank Statement vs Xero” summaries at the final date.[4][2]
- Chart of accounts (CSV or Excel).[2]
- Fixed asset register and depreciation schedules (if maintained in Xero or add‑ons).[4][2]
- Contact list (members, donors, suppliers, funders) in CSV, if relevant to financial records.[2]
- Any tracking category reports that help explain how funds were used (e.g. by project, event).[4][2]
- Download PDFs for sales invoices and bills if they only exist inside Xero and you don’t already file them separately.[2][4]
- Ensure you have copies of bank statements from your bank for all relevant years, to support Xero reconciliations.[4]
- Save any documents attached in Xero that are important for audit / IRD (e.g. grant contracts, large invoices, asset purchase documents).[2][4]
6. Organise and store the archive
- Create a top‑level folder such as “Society Name – Financial Records – Archive”.[1][4][2]
- Within that, create subfolders per year (e.g. “2020–2021”, “2021–2022”, …, “Final Period”) and place all exports and documents into the relevant year.[1][2]
- Keep a short “READ ME” document noting:
- Final balance date and date of deregistration/wind‑up
- Which years are included
- Which software was used (Xero)
- Store a backup copy in at least one other place (e.g. external drive plus cloud storage).[5][4]
7. Confirm retention responsibilities
- Record in final committee/AGM or liquidation minutes:
- Who will hold the electronic archive
- Where it will be stored
- Provide the custodian with any passwords or access instructions they need (or ensure files are in non‑password‑protected formats but stored securely).[3][4]
- Once exports are checked and backed up, decide whether to:
- Cancel the Xero subscription entirely, or
- Note the date of cancellation/downgrade in your “READ ME” or wind‑up file.[8][3]
- https://is-register.companiesoffice.govt.nz/help-centre/running-your-incorporated-society/records-you-should-keep/
- https://community.net.nz/resources/nz-navigator-trust/what-information-incorporated-societies-should-keep
- https://is-register.companiesoffice.govt.nz/help-centre/ending-an-incorporated-society/
- https://www.myob.com/nz/resources/guides/accounting/business-record-keeping
- https://www.taxtechnical.ird.govt.nz/standard-practice-statements/general/sps-1301-retention-of-business-records-in-electronic-format-application-to-store-records-offshore-an
- https://communitytoolkit.org.nz/choosing-the-right-legal-structure-for-your-group/incorporated-societies/
- https://www.workingforworkers.org.nz/incorporated-societies-advice/how-is-an-incorporated-society-closed-down-or-wound-up%3F
- https://www.nbr.co.nz/xero-finally-gains-ird-approval-to-keep-its-customers-records-in-the-cloud/