A 'financial year' is truly suited to business reporting and statutory needs. In reality, business spans across financial years, so 'real needs' get constrained by these financial periods.
As an example, receivables (Sundry Debtors) is an area that is frequently plagued by 'confusion' - the need to send reminders, resend statements of accounts and persistent follow up - may require that you need to look at figures from date 'x' to date 'y' - and one or more financial periods can be between these two dates. With Tally.ERP 9, you can specify any date range and perform any operation that you need to.
Comparison of Periods, say Q2 this year vs. Q2 last year, often required for shareholder and statutory reporting are easily accomplished.
You may also need to break up periods into smaller chunks, instead of the 'year'. While looking at the reports, you can instantly view them broken into periods of your choice (daily, monthly, quarterly etc). For studying trends, locating unusual figures, or comparing activities for different periods, this is invaluable.
Take the case of budgets. Say for a five year long project - and for various ledgers you need to have a budget set up for five years, another for each year, another two that are 2 ½ years... you can setup such budgets, and compare budget vs. actual for any!
In effect you can 'zoom out' as well as 'zoom in' to any period of your choice.
Any changes made or a transaction inserted anytime, are instantly carried forward - no matter how far back these are made (from a security standpoint, you might need to restrict data entry or changes to transactions prior to a specific date - this is available via the User security control features).