Bookkeeping can be a tedious business. More than likely, your passion focuses on the health and fitness of your clients and not the number-crunching that goes along with being a business owner.
Accounting and keeping your books in order can be confusing, time-consuming, and downright frustrating. Unfortunately, it is also a necessity. Well-organized books ensure that you have access to accurate and up-to-date financial information, help you make sound business decisions, stay compliant and prepare in advance when tax season rolls around.
Luckily, there are some essential bookkeeping tips that, when practiced, will help keep your business better organized and running smoothly.
1. Separate your personal and business accounts
Many times, especially with small businesses, personal and business accounts can get muddied and mixed up. This may not seem like an issue at the beginning when your business is small and you are only dealing with a few clients, but as your clientele base grows, it can make bookkeeping a much more complicated process.
Separating your personal and business accounts will make bookkeeping easier and allow for much more efficient tax returns. It can also give you the advantage of more accurate cash flow management and establish stronger credibility and professionalism with your business.
2. Keep your books up to date throughout the year
Your business is busy, which is a good thing! Unfortunately, it can also take your focus away from tasks like bookkeeping. Too often, business owners don't make their bookkeeping a regular priority, leading to more significant issues later on.
By keeping your books up to date throughout the year, you can have constant visibility on your gym's financial performance, allowing you to identify potential issues ahead of time. You can also make better business decisions since you will always have access to reliable and timely financial information, not to mention next tax season will be a breeze. If you don't have the time or the knowledge to manage your own books, consider outsourcing the work to a professional.
3. Choose the right accounting software and tools
Using the right accounting software and tools can make keeping track of your numbers a much easier task. While Excel is an excellent program with so many great applications, managing your books isn't one of them. Try to stay away from excel when tracking your financial data and instead adopt a cloud-based accounting software like QuickBooks Online or Xero. Software like these integrate with other accounting tools and has the general functionality that most gyms and fitness studios require.
Another tool to consider using is Dext Prepare. This program helps your business manage its receipts, invoices, and reports in a well-organized and easily accessible cloud-based format. Using Dext Prepare, you can access your information from anywhere, at any time. You can even use their mobile app to take photos of your documents on the go, eliminating the need for keeping physical receipts.
Their expense management feature gives you optimal control over your expenses, allowing you essential insight into your business spending habits and keeping your business on track when it comes to budgeting.
Using these tools to help manage your bookkeeping allows your business to go completely paperless and gives you access to all of your financial data any time, from anywhere, through the cloud.
4. Leverage your gym management software for bookkeeping data
When choosing the software that you will use to manage your gym or fitness studio, look for a program with dual functionality. You want to sync the sales and billing data on your gym management software with your accounting software to minimize errors and save time on manual data entry.
A software like Mindbody is an excellent choice. It can be used to obtain the sales and billing data necessary for the bookkeeping process and is specially designed to cater to the fitness industry.
5. Keep track of your equipment and depreciation
For most gym and fitness businesses, your success is dependent on the equipment that your members use. Equipment is a fixed asset, and it depreciates over its lifetime. Because of this, be sure that when you purchase your equipment, you don't expense it at the time of purchase as it could lead to misstated financial statements. You will also need to manage and track the depreciation value of your equipment asset every year.
Fitness equipment trends may change over time as technology advances. Therefore it's important to keep track of the value of your equipment so that you will be able to sell your old inventory for a reasonable price, helping to subsidize the cost of purchasing new equipment when the time comes.
6. Conduct monthly inventory checks
If your facility has a retail section that sells merchandise or fitness gear, you should conduct monthly inventory checks to prevent theft and eliminate errors. These regular checks can also help you stay on top of inventory levels and identify the top-selling products that your members want to buy.
By following these helpful tips, you can manage your business’s finances, making the entire bookkeeping process a much simpler one. If, however, you still feel overwhelmed, perhaps outsourcing is the right choice for you and your fitness business. This will allow you to spend more time focusing on your clients and will leave your bookkeeping in the hands of an expert.
For more information on how outsourced bookkeeping can work for you, contact Enkel today.