Editor's Corner

Good morning, all. Today we’re going to talk about calendars! Nothing too fancy, but it seems that some of us are slightly confused about the difference between a calendar year, a fiscal year, a regular year, and a physical year.

Here are some definitions for you, from a financial context.

Physical year: This is not a common term in financial contexts. There are occasions where the term might be used, but what you are hearing at meetings and presentations at Jack Henry is fiscal, not physical.

Regular year: This is an alternate way of referring to the “calendar year.” Again, here at work you will likely hear calendar year, so throw “regular year” in the garbage.

Calendar year: This is the 12-month period beginning on January 1 and ending on December 31.

Fiscal year: (From the Grammarist) This is “a consecutive 12-month period used by organizations for accounting purposes, budgeting, and financial reporting. It does not necessarily align with the calendar year, which runs from January 1 to December 31. For example, the U.S. federal government operates on a fiscal year that runs from October 1 to September 30.” [KC – As most of you are aware, the Jack Henry fiscal year runs from July 1 to June 30.]

From our eager AI friends, here are some of the major differences between the calendar year and the fiscal year:

Start and End Dates:

· Calendar Year: Always starts on January 1 and ends on December 31.

· Fiscal Year: Can start and end on any date, as long as it lasts for 12 consecutive months.

Purpose:

· Calendar Year: Primarily used for personal and corporate tax reporting, aligning with the IRS requirements for most individuals and businesses.

· Fiscal Year: Used by businesses to better match their financial reporting with their operational cycles, allowing for more accurate financial analysis and planning.

Flexibility:

• Calendar Year: Fixed and unchangeable, making it straightforward for financial comparisons across different entities.
• Fiscal Year: Offers flexibility, allowing businesses to select a reporting period that aligns with their specific financial activities, which can be beneficial for seasonal businesses.

Additional Examples:

• Companies Using Calendar Year: Many large corporations, such as Amazon® and Google™, use the calendar year for their financial reporting.

· Companies Using Fiscal Year: Walmart® and Target have fiscal years that do not coincide with the calendar year, often ending in January to capture post-holiday sales.

I hope that clears things up a little!

Kara Church | Technical Editor, Advisory | Knowledge Enablement

Pronouns: she/her | Call via Teams | jackhenry.com

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