The 4-5-4 calendar was devised with the peculiar needs of the apparel and sporting goods retailers considered. Cycles are periods of time between the start and end of a selling season. In general these business cycles end in July and January. Therefore the 4-5-4 calendar begins with the month of February, which is traditionally the beginning of the spring selling season.
The 4-5-4 calendar divides the year into quarters with the first and last month of each quarter consisting of 4 weeks each and the middle month of each quarter consisting of 5 weeks. Each accounting calendar month will begin on a Sunday and end on a Saturday and consist of the same number of selling days as the same month last year.
Each month in the 4-5-4 calendar will consist of either 4 or 5 weeks making it very easy to analyze payroll costs. Each accounting period for one business year corresponds to the same period last year, and the next year. This provides an invaluable review and forecast tool for management and is especially suited for use in preparing sales forecasts and operating budgets.
Since each month ends on a Saturday retailers have the convenience of taking physical inventory counts at week end and not having to either subtract or add sales which preceded or followed the physical count to arrive at a clean cut-off, the inventory counts should therefore be more accurate.
The 4-4-5 Calendar in budgeting and accounting is the breakdown of each month into weeks by counting the number of times Friday occurs within each month. For example: Jan = 4 weeks, Feb = 4 weeks, Mar = 5 weeks, Apr = 4 weeks, May = 4 weeks, Jun = 5 weeks… etc. to total 52 weeks in a 12 month period. Every third month Friday will occur 5 times. All other months Friday will occur 4 times. In the months where Friday occurs 5 times, it is considered a 5-week month, the months with four Friday’s will be considered as four week months.
Generally speaking most companies will divide each quarter of the year into three monthly periods consisting of two four week months with 28 days and one five week month with 35 days. This type of grouping of monthly periods can also be set up as 5-4-4 weeks or 4-5-4 weeks, but 4-4-5 seems to be the most common with companies.
