why do we setup a financial year for our accounts?

Answer 1

Most common reasons:

Retailers want the goods sold in December for Christmas to be in the same reporting years as goods returned in January so that the net sales will be a meaningful number.

Manufacturers who have a weekly production cycle (i.e. they build during the week and ship on Friday) want the same number of Fridays in each reporting year and quarter so that period to period comparisons are meaningful.

The business starts on other than January 1 and doesn't want a fractional year at the beginning, again to make history and comparisons consistent.

Answer 2

Sometimes companies want a financial year to spread out their major deadlines rather than having everything financial, tax, and payroll all coming together around Christmas and New Year's when accountants and executives would rather spend some time with their families over the holidays. Another reason is to fully contain an event, such as the heavy selling season.