Capterra Glossary
Fiscal Year
A fiscal year is a 12-month period that businesses use to file and report their finances. However, fiscal years do not necessarily have to correspond with the calendar year. Corporations typically determine their fiscal year based on their business activities, revenue cycle, and tax reporting requirements. Fiscal years are important because they allow companies to accurately measure how much revenue they have gained over a 12-month period. This information is needed to appropriately file their business taxes.
What Small and Midsize Businesses Need to Know About Fiscal Year
Small and midsize businesses with unique sales patterns, such as small retailers and agricultural corporations, often shape their fiscal year according to their busy season. For instance, small retail stores tend to be the busiest during the holiday season (at the end of the calendar year). In light of this, small retailers tend to end their fiscal year around February, as this gives them time to collect all payments for holiday-related purchases from their customers and file their taxes more accurately.
Related Terms
- Compound Annual Growth Rate (CAGR)
- Financial Planning and Analysis (FP&A)
- Selling General and Administrative (SG&A) Expenses
- Hedge Fund
- Gateway
- Record to Report (R2R)
- ROIT (Return on Information Technology)
- Chief Revenue Officer (CRO)
- SAC (Subscriber Acquisition Cost)
- ROE (Return on Equity)
- Tokenization
- Net Present Value
- Fintech
- Financial Management System (FMS)
- Business Capability Modeling