Accounting is always one of the most challenging tasks that business owners must deal with. While they usually have someone assigned to handle this matter, knowing what happens with their financials is essential for profitability and better decision-making. While tools such as lease accounting software can make the entire process easier, it’s important to be aware of all specific features such software offer and which can be beneficial for your business. One of these tools is the 13-period accounting support, which Yardi Corom has recently added to its lease accounting software. But what does it mean to have a 13-month calendar and how can it help your business?
What is a 13-Month Calendar?
Unlike the usual calendar we are used to using, the 13-month calendar is split up into 13 months or periods of exactly 28 days each. This ensures that accounting periods follow the same dates from year to year allowing for a consistent accounting period and reporting. Furthermore, this method ensures sales comparability year-on-year as the layout of the calendar lines up holidays and allocates the same number of Saturdays and Sundays in a comparable period.
How Does It Work and Why Does It Help?
Having a consistent financial calendar composed of 13 accounting periods of exactly 4 weeks each, or 28 days, allows for an easy and accurate comparison between periods from one year to another. The fiscal year always ends on the same day of the week, usually Sunday or Monday due to end-of-period activities, such as inventory counting and ease of payroll reporting and processing. This allows businesses to better evaluate their finances and determine what changes they need to make to see improvement and profitability from one period to another, or from one year to the next.
This particular calendar is best for businesses in the retail, hospitality, grocery and manufacturing industries where certain days see more influx and sales than others. The 13-month calendar makes sense for businesses in these industries as there is a better comparability of the numbers in a profit and loss report as every four-week cycle has the same number of each weekday and the same number of days total. Also, the month-by-month comparison makes it easy to look at each individual month as it compares to another given that all months have the same number of days. Another reason for having this calendar in place is that planning for physical inventories is easier as the end of the period is usually at the end or beginning of the week, so either Sunday or Monday. These days are usually slower in terms of traffic and making an accurate inventory is more probable, allowing for businesses to be better prepared for the upcoming week. Furthermore, aligning the weekly report periods with the payroll periods makes it easier and quicker for payroll cost allocation. This can lead to an overall improvement in cost allocation across periods leading to better pricing decisions.
While this method can be somewhat difficult to understand and properly implement due to everyone’s familiarity with the traditional, 12-month Gregorian calendar, it doesn’t mean it’s not worth the investment of understanding and implementing for your business. Fortunately, tools like Yardi Corom lease accounting software can help facilitate the implementation and reporting associated with the 13-month calendar supporting your accounting team while allowing you to focus on making better financial decisions for your business.
Yardi Corom is a simple and comprehensive accounting, lease and workplace management solution for CRE tenants. Our cloud-based software solution increases efficiency and accuracy across your entire lease portfolio: manage leases and subleases, track key lease data, centralize transactions and become FASB/GASB/IFRS compliant. To learn more, you can visit our website or schedule a meeting with our team.
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