Fiscal year

What is a fiscal year?

A fiscal year is the 12-month period a company uses for its accounts and reporting, which can end in any month and may differ from the calendar year. The IRS also allows a 52-53 week year. Retailers often end their year after the holiday season. A public company's quarters, guidance and filing deadlines all follow its fiscal year, and a change in fiscal year is reported on Form 8-K.

Why it matters to a revenue leader

The fiscal year sets the quarters the revenue team is measured on, and it often differs from the customers' budget year. A services company with a fiscal year ending in June may sell to facility managers who budget on the calendar year, so its year-end push lands while customers are halfway through their budgets. Knowing both calendars helps the CRO time renewals, price increases and large proposals. After an acquisition, mismatched fiscal years can also scramble quota periods and year-over-year comparisons.

A public building services company's fiscal year runs from October to September, so its first quarter ends December 31. Many customers spend remaining budget in December, then hold new projects until their new budgets are released early in the year. The CRO sets a lighter target for the second fiscal quarter and starts budget conversations for next year's projects in late summer.