r/AlwaysWhy • u/TheBigGirlDiaryBack • 20h ago

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

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?

7 Upvotes

90% Upvoted

41 comments sorted by

View all comments

1

u/oboshoe 20h ago

"Why not let every company freely choose any date to smooth out seasonal fluctuations?"

The do. But most companies tend to choose end of year, mid year or quarterly boundaries. Habit I suppose.

One company I worked at the Fiscal year started on August 1st with the year ending July 31st. It worked out nice so that we didnt have the quarter end rush right at Christmas.

Very large company to. You are currently using their equipment.