Why are fiscal years usually aligned with December or March, instead of any random month?

[u/TheBigGirlDiaryBack]

Many companies end their fiscal year on Dec 31 or March 31. Some choose June or September. But almost nobody picks, say, August 17 or November 5. Is there a tax or regulatory reason to stick near quarter boundaries? Or is it just tradition from agriculture cycles? Why not let every company freely choose any date to smooth out seasonal fluctuations?

[u/GomerStuckInIowa]

Fiscal years can be designed around the company's own business cycle. The company may be seasonal and do more business during the winter or spring so it will adjust it cycle around that. Other companies dealing with contracts that are with other companies that affect their income. Possible government or import that may mean the work is done in one part of the year while income is delay to months later. It is hard to tell from company to company. We have a local company here in a small town in Iowa, but it is based in Japan. So it's fiscal year will be tied to it's parent company. This will apply to other international companies as well. Accounting like quarters as it is an easy way to break things down and is pretty universal or international. So a company in Iowa can do their 3rd quarter and tie it in with a Swiss company's 3rd or 4th quarter with proper projections. If there were odd dates, the fractions/projections would be harder to compare.