Happy New Year! The Benefits of Observing a Fiscal Year.

A fiscal year is a year in time observed by a person, group, or agency that may or may not coincide with a calendar year. A calendar year is generally January 1 through December 31. A fiscal year may star on any date and end one year later on the date just before the beginning date.

Have you ever wondered why some companies and nearly all governmental agencies observe a fiscal year that is not the same as the calendar year? What benefit could be attained by such practice?

Many governments, corporations, and non-profits benefit from observing a fiscal year by choosing dates that match cycles in their operations. For example, the United States government observes a fiscal year that starts on October 1 and ends on September 30. This matches the collection of funds, requests for funding and the creation of a budget (as if our government bothers with that these days).

Non-profits may similarly have a fiscal year that matches the timing of grant awards.  Corporations may have fiscal years that match accounting practices, cycles in business, or the date the organization was formed.

A fiscal year is observed so that the organization may benefit from a different year starting date than January 1.

I’m not suggesting you change your fiscal year to July 1, unless of course that provides some benefit that you are missing. If so, check with your accountant (I am not providing any professional accounting advice). Then what does this mean for you and your business?

Simply put, the year is now half over (assuming you follow the calendar year). Is it time to metaphorically close out the books on the past six months, twelve months, or some other time frame? Has your business gone through a challenging few months that would best be put aside and “closed out”? Have you?

Or have you enjoyed a successful campaign for the past few months, or half year?

Whether it’s time to celebrate success or close out a less than stellar performance, July 1 is the ideal time to do it.

Reflect on the past six months. Identify the wins and celebrate. Segregate the losses and adjust.

Now is the perfect time to reflect for a moment, and then to begin anew. And that can happen any day of the year.

Follow for more ideas on how to improve your business and your life @SpeakerGlenGould