The Language of Business: Fiscal Year End or Calendar Year End; it’s a Toss Up!

A follower recently recommended we do a series of blogs on the Language of Business.  There seemed no better place to start than with a business owner’s choice for the business year end.

Time oversees all we do.  And, in business, there are some time elements we actually are able to choose, which are not thrust upon us, like the standard work day.  Choosing your company’s year end is up to you with advice from your accountant.  It is one of the first business decisions you make as an owner and leader of your firm.  

Calendar year end is a term that means your company follows the calendar with its year of twelve (12) consecutive months, ending December 31st.  For many of us, it is the easiest choice and the one that simplifies tax reporting.   Most for profit firms we have worked with are in a calendar year end, including Illuminate.  

Fiscal year end or FY usually indicates twelve (12) consecutive months of reporting ending in any month other than December.  Fiscal year ends often align with grant award dates if your organization is a not for profit or September 30th, the government year end, if your business relies on government agencies for the majority of its work.  In either of these cases, aligning your fiscal year end with your Client’s or financial source of revenue, allows your company to have a full annual life cycle of both payments and income.  

When choosing your company Year end upon creation, speak with your accountant.  Choose a fiscal year end to align with grants or income or, if you are like the most of us, the calendar year end is a gray place to end.  

Field work for our canine friends has a beginning and end and usually those places are preset.  Follow the pack in your particular industry when it comes to setting your own start and finish lines, and you should not find yourself out of bounds at any point. 

Be well.