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October 24, 2009

What is a natural business year?

A natural business year is the period of 12 consecutive months (or 52-53 consecutive weeks) ending at a low point of an organization’s activities. For example, a school district will have a natural business year of July 1 through June 30, since classes for the school year end in early June.

A retailer’s natural business year might be the 52-53 consecutive weeks ending on the Saturday closest to each February 1. This is a low point of activity as it follows the retailer’s holiday season and its January clearance sales. The 52-53 week periods (instead of 12 month periods) will result in an equal number of Saturdays in most of the natural business years (as well as in the 13-week quarters and in the 4-5 week months).

Many companies have a natural business year of January 1 through December 31. On the other hand, some companies are required by government regulations to end their accounting years on December 31, even though it is not the end of their natural business year.

The term fiscal year is associated with companies having financial reporting years that do not end on December 31.

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11 Responses to “What is a natural business year?”

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  2. Dev on October 29th, 2009 11:27 pm

    In a Indian Business Process the Natural Business Year (Accounting Year) is form 1st April to 31st March..

  3. P.RAMAMURTHY on October 30th, 2009 7:07 am

    natural business in india 1st april to 31st march.in indian govt.ist jan to 31st december.

  4. bhagyashee ashar on October 30th, 2009 7:17 am

    as per indian bussiness the accounting year is 1st april to 31st march .
    in other words we can say that natural business year asper india 1st april to 31st march.

  5. Andy@Accounting a la Carte on October 31st, 2009 5:08 pm

    I think a “natural business” year is one where you make a profit..I think that would be pretty Natural, but hey if you want a date…typically it’s Dec 31

  6. syed on November 3rd, 2009 4:43 am

    hello!!
    this is a good site and i have one question
    i am working as an accountant but the problem is i am not upto that knowledge after working a lot in accounts how can i be perfect in my subject and how can i know the structure of accounting thanks

  7. abdullah on November 6th, 2009 3:07 pm

    please kindly give all about manufacturing accounts

  8. CYNTHIA OMA on November 7th, 2009 3:33 am

    This site is really interesting, and I want to study account but it seems it is difficult in a way, I want to get, the primary knowledge of account before I proceed to this. Please can u send me the introductory part of this subject matter:ACCOUNT,so that it will be easy for me to study on my own, in order to be ready to accept it as a course of study when I enter school.
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  9. jolly on November 7th, 2009 7:21 am

    please kindly give all about manufacturing accounts and how the foot note items are treated

  10. jollyjolly on November 7th, 2009 7:24 am

    how are transactions treated in the consignment accounts and why do we debit profits in the joint venture accounts

  11. ACoach on November 7th, 2009 8:01 am

    You can read our accounting materials at no cost on AccountingCoach.com. Best to you.

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