the idiocy of the fiscal year

My boss pulled me aside today and asked me if I had purchased tickets yet for my upcoming trip to Asia (yes, I'm going again). I told him that I hadn't, and he looked quite relieved. Although I had been instructed previously to purchase and expense the tickets before my company's fiscal year ends (the end of February), new direction had come down from our VP: no more travel expenses this fiscal year. I reminded him that my ticket would probably cost thousands more if I purchased it later since I wouldn't be purchasing it very far in advance, and he said that was OK, as long as it didn't get expensed in February.

To you and me, this is insane behavior. You might wait a couple weeks to buy something so that you'd have a little extra float from your credit card company, but you wouldn't pay 30-50% more for that item, would you? I certainly wouldn't, and neither would anyone else I know. The corporate mentality, however, is quite a bit different. Hitting that budget is paramount, and nothing else matters. Perhaps this is part of the problem with corporate America today. Perhaps it's the whole problem with corporate America today.

I've seen far worse examples of how fiscal periods affect behavior. For example, ever walk into a store and wonder why the thing you wanted was out of stock? I have seen actual examples of product shortages that have been directly caused by this imaginary fiscal period thingy. You know--"I want to hit my inventory turnover budget, so I'm not going to buy any more inventory for a while, even when the stores need it." So, rather than actually sell stuff to people, we just let the shelves go empty for a while so that we can hit some budget that some bean counter (probably me) put together.

And then, of course, there's channel stuffing. If you're not familiar with the practice, channel stuffing is when a supplier sells a customer more inventory than the customer needs (the customer has to be willing to buy, of course) in order to inflate the supplier's financials (usually for the purposes of some sales manager getting a bonus or the company looking good to Wall St.). Sometimes no money changes hands. Sometimes huge discounts are given to the customer. Sometimes the customer actually returns all the inventory after a certain amount of time. Anyway, channel stuffing is illegal when it's done to inflate a supplier's financial position for Wall St. reporting purposes, and ethically dubious when done for the purpose of getting a bonus or the like. Most of the stuffing I've heard about, and all the stuffing I've been asked to accept (and yes, I have occasionally accepted it as a favor to a supplier that's been a good supplier) has been in relation to some imaginary fiscal period ending.

I understand the reasons why we have fiscal years/months/weeks/days, but the behavior they drive is often insane. REALLY insane. And they often drive me insane, so here's my vote: down with fiscal years.