A fiscal year is an accounting period in which governments and businesses record their financial transactions. It consists of 12 consecutive months and can begin at any time depending on the needs of the company. A calendar year is a fiscal year that begins on January 1st and ends on December 31st.
Within the fiscal year, all financial reports, statements, tax filings, audits, and other financial activities are recorded. Companies review their financial growth and make budgets for the following year at the end of the fiscal year.
Companies can choose fiscal years that are best suited to their needs. Choosing a distinctive fiscal year can benefit seasonal businesses. Ending the fiscal year at a low point in business aids in lowering accounting and auditing costs.