Why do companies use fiscal year instead of the calendar year?
In: Other
Two main reasons.
First of all end of year is a lot of work and you dont want that in the month (december) where you make most of your sales (like retail shops) are and where a lot of people want time of (christmas).
Then you also dont want to cut your high sales season in half as this screws with reporting. For example your high sales season is from December to January and you had a bad last year but this year is much better. If your cut of is 31 of December it might look like you had an average year because the January sales from last season are still in your reporting when in reality your season was very good. Then there might other factos like you work a lot with schools so you want to line up your fiscal year with schools years. Or you work with farmers and so want to end your fiscal year after harvest or what ever else.
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