The default cycle impacts your contributions.  It's helpful for them to be assigned to the correct cycle.

This article will show you how to adjust your default cycle and to create a new calendar year if one is needed:  http://www.trailblz.com/kb/?action=view&kb=191&cat=1

Have you got a bunch of contributions assigned to the wrong cycle? This article (http://www.trailblz.com/kb/?action=view&kb=212&cat=1) will walk you through changing them all at once.  The article has all political references, but the process is the same.  You will use the links circled in the picture above.