As a purveyor of yoga, one may possess the capacity to complete tasks such as invoice preparation, tax obligation fulfillment, or monetary management. Nevertheless, an accountant is a more proficient option for these endeavors.
For those in the yoga community with a large volume of sales, it is imperative to enlist the services of an accounting agency to supervise their financial affairs.
This task can be rather arduous to execute single-handedly; thus, it would be judicious to retain the services of a capable accounting firm.
Recent research has discovered that proper accounting practices can save yoga instructors a significant amount of money. This practice can enhance efficiency and accuracy, which is essential in today’s fast-paced society.
This article will tell you about the different options available to yoga teachers and the associated costs.
What is accounting for yoga teachers?
Accounting involves recording and summarizing financial information to ensure that a company is financially stable and compliant with accounting regulations.
This includes a variety of tasks, including tracking expenses, preparing tax returns, and verifying the accuracy of financial statements.
For small business owners, having a basic understanding of bookkeeping and accounting is essential.
However, they may not possess the financial knowledge required to make informed decisions that are critical to the success of their business. This can make it difficult to allocate funds effectively and manage their finances efficiently.
By investing time and resources into accounting practices, small business owners can gain a better understanding of their financial situation, make informed decisions, and ensure the long-term success of their business.
Proper accounting can help identify areas for improvement, detect financial irregularities, and ensure compliance with financial regulations. It can also provide valuable insights into the financial health of a business and help plan for future growth and expansion.
How to do accounting for yoga teachers in 7 steps
We’ll walk you through each step to understand the basic accounting procedures to manage your finance properly.
Find the most suitable accounting software
Accounting software offers a wide range of features that can help you with various accounting tasks, such as recording transactions, processing invoices and bills, creating financial statements, and generating charts to visualize your business finances.
Not only does this tool simplify your accounting tasks, but it also brings numerous benefits to your business.
According to recent studies, businesses that use accounting software tend to be more profitable and have better cash flow than those that don’t. Moreover, this tool can reduce the time spent on accounting tasks by up to 34%, giving you more time to focus on other important aspects of your business.
We understand that each business has unique needs, which is why we’ve researched and compiled a list of options that can cater specifically to yoga teachers.
These features are tailored to meet the needs of yoga teachers, and we believe they can be incredibly helpful in managing your finances efficiently.
Zoho Books
Why should you use QuickBooks? It's the best option for small to medium-sized businesses since it has too many features that fit this category. QuickBooks is the industry standard and most accountants work with it. It's also ideal for small business owners without in-house bookkeepers, since it allows you to use its online version from any device.
- Easy and quick to set up with the support of non-accountants
- It integrates with most other small business software out there that has any sort of financial functionality
- Provides good accounting and financial reports
- You can track old financial records and compare them to the current records to get valuable insight into the financial situation
- Easy to access from any device
- You can back up your data to the cloud and access it remotely
- You can only include 1000 daily records on the invoice
- The banking function takes several days to sync up to the banking balance
- Not all bank accounts would link originally to the software
- Problems with exporting the data as you can’t even export to Google Sheets
- Too many features confuse business owners
QuickBooks
Why should you use QuickBooks? It's the best option for small to medium-sized businesses since it has too many features that fit this category. QuickBooks is the industry standard and most accountants work with it. It's also ideal for small business owners without in-house bookkeepers, since it allows you to use its online version from any device.
- Easy and quick to set up with the support of non-accountants
- It integrates with most other small business software out there that has any sort of financial functionality
- Provides good accounting and financial reports
- You can track old financial records and compare them to the current records to get valuable insight into the financial situation
- Easy to access from any device
- You can back up your data to the cloud and access it remotely
- You can only include 1000 daily records on the invoice
- The banking function takes several days to sync up to the banking balance
- Not all bank accounts would link originally to the software
- Problems with exporting the data as you can’t even export to Google Sheets
- Too many features confuse business owners
Record entries in your software
The software takes care of all the complicated calculations and prepares financial statements that give you a clear picture of your business’s financial health.
To save time and effort, it’s important to set up recurring expenses such as rent and salaries in the software. This way, you don’t have to manually enter the same amounts every month. Additionally, creating invoices for each client helps you keep track of your revenue and ensures timely payments.
One of the best features of accounting software is the ability to display a chart of your business’s financial status.
This chart provides valuable information about your income and expenses, allowing you to make informed decisions about your business’s future.
Record Cost Of Goods Sold (COGS)
COGS, or “cost of goods sold,” is a crucial metric for any business that deals with inventory. It’s not just a matter of tallying up the initial cost of the items sold, but also considering additional expenses such as shipping and handling.
By taking into account all the expenses associated with selling the inventory, COGS provides a more accurate picture of a company’s financial performance.
This information can help businesses make informed decisions about pricing, sales strategies, and inventory management.
When you add your products and services to your accounting system, the system automatically calculates your COGS based on the invoices you create.
This allows you to stay on top of your costs and make data-driven decisions that can lead to increased profitability. So, paying attention to your COGS is not just a matter of good bookkeeping, but it can also help you make smarter business decisions.
Make a chart of accounts for proper bookkeeping
Creating a chart of accounts is a crucial aspect of managing finances for yoga teachers. It allows them to keep track of their income and expenses systematically, which can help them make better financial decisions for their business.
By using a chart of accounts, yoga teachers can easily see how much money they’ve spent on rent, salaries, and other costs, as well as how much money they’ve earned.
A typical chart of accounts for a yoga teacher might include various accounts, such as income from classes and workshops, costs associated with purchasing yoga equipment and supplies, expenses related to salaries and rent, assets such as yoga mats and props, and any leftover funds.
Once a yoga teacher has earned a profit, they may choose to distribute it to their shareholders as equity, or they may decide to retain the earnings for future use.
Automate the accounting process to save time
Accounting process automation saves time by automating tasks that can be time-consuming, like reconciling accounts, paying salaries, and issuing invoices.
Automating the accounting process can help save businesses time each week. One example of an automation tool that can help is invoice processing software. This software can save businesses up to 50% of the time it would take to process invoices manually.
Hire an accountant
They can help you set up automated processes that will automatically take care of your business finances. An accountant can help you keep track of your finances, so you don’t have to pay any fines or penalties.
An accountant can help you keep your business finances accurate and organized. It’s a good idea to hire one if you don’t have time to do the work yourself.
Best accounting agencies for yoga teachers
Here are some good accounting firms you might want to consider.
1-800 Accounting Agency
1-800Accountant is an accounting agency based in New York. 1-800Accountant specializes in working with small businesses. It offers services starting from $0 to $375/month, which is quite affordable.
Accotax Accounting Agency
Accotax is an accounting agency based in London that works internationally with small businesses, partnerships, and other business types. Accotax’s pricing is perfect for startups and self-employed as it ranges from $265 to $600/month on average.
It has a 4.9-star rating on Google My Business, a 4.7-star rating on Facebook, and a 4.9-star rating on Trust Index.
Best 5 accounting tips for yoga teachers
1-Use accrual-based accounting to record transactions
2-Understand basic tax requirements
3-Keep your business bills
4-Reconcile your transactions
5-Create a business bank account
Use accrual-based accounting to record transactions
Accrual-based bookkeeping, in essence, is an accounting methodology that records a company’s earnings and expenditures at the time when they occur, rather than when the money is received or disbursed. This approach allows enterprises to more effectively monitor their fiscal performance over a prolonged period of time.
By implementing the principles of accrual-based accounting, businesses can ascertain their earnings and expenses over time, which empowers them to make more informed and realistic projections, recognizing that they may need to settle bills sooner than anticipated, such as those related to expenses.
Consequently, the auditing process serves the purpose of ensuring that a company’s financial statements are precise and adhere to the Generally Accepted Accounting Principles (GAAP), thereby maintaining consistency with other businesses within the same industry.
Understand basic tax requirements
When it comes to filing taxes, it’s crucial to know which forms are required and to take advantage of any deductions or credits that could potentially lower the amount of taxes owed. For businesses, the 1120S and 990T forms are commonly used to report income and expenses.
There are numerous deductions that individuals can claim on their taxes, such as mortgage interest payments, charitable donations, and medical expenses.
Credits are another way to reduce taxes owed and can be thought of as subsidies that incentivize spending in specific areas. Some popular credits include child care costs, earned income credit, and student loan interest deductions.
It’s essential to accurately report all sources of taxable income, including wages, self-employment earnings, investment dividends, and capital gains or losses. Failure to do so could result in underpayment penalties if the IRS audits you later on.
It’s also important to keep in mind that each state has its own tax laws and filing deadlines, which may differ from the federal tax deadline of April 17.
Make sure to consult your state’s regulations and be aware of any special tax rules that apply to your specific circumstances. Taking the time to thoroughly understand tax laws and regulations can help you minimize your tax liability and avoid potential penalties.
Keep your business bills
Effectively handling your bills can often prove to be a challenging undertaking, but instituting a reliable system can ensure the seamless running of your business operations.
An efficient method for managing your financial affairs is to establish an online payment system that enables you to make bill payments quickly and conveniently. Melio serves as an exceptional instance of such a system, as it streamlines the payment process.
Such systems can facilitate timely payments, thereby averting late fees and interest charges that may accrue due to late payments.
Additionally, setting up reminders can help you stay on top of your payments and prevent you from missing any deadlines. Moreover, automating your payments can save you substantial amounts of time and money in the long haul.
Reconcile your transactions
The process of reconciling financial records is crucial to ensure the accuracy and currency of all accounting transactions. Through this process, discrepancies and errors can be identified and rectified before they escalate into more significant problems.
To reconcile a debt, it is necessary to collect all pertinent documents, including bank statements, invoices, and receipts. This will help minimize any discrepancies between the amount owed and the actual amount spent on goods or services.
The subsequent step involves entering each transaction into the online banking feature, which will automatically download the relevant transactions from the bank account. These transactions must then be cross-checked against the associated paper trail documentation, such as invoices and receipts, to ensure consistency and accuracy.
In case of any inconsistencies, further investigation may be necessary to identify and rectify the discrepancy.
Create a business bank account
As a business owner, it is crucial to establish a dedicated business bank account to efficiently manage your finances.
This allows you to keep track of your income and expenses, ensuring that you are paying taxes appropriately. Moreover, having an organized and separate account provides a level of financial transparency that will enable you to understand your business’s financial health better.
Another essential aspect of managing your business is to obtain an insurance policy that protects your company from any financial liabilities that may arise in the event of any mishap. However, before opening a business bank account, there are a few critical steps that you need to consider.
Firstly, you need to decide on the type of business entity you want to register, such as a sole proprietorship, partnership, or corporation. Once you have determined the type of entity, you must research different banks to find the best one that suits your business needs.
After selecting the bank, you need to gather all the required documentation, such as articles of incorporation or DBA forms, and proof of identity to open the account. Finally, to activate your account, you need to make an initial deposit into the new account.
Fortunately, setting up a dedicated banking solution for small businesses is relatively simple and does not require any complicated procedures.
By taking this step, you can ensure that all funds related to your business are tracked efficiently and accurately, avoiding any potential legal issues down the line.
Accounting for yoga teachers FAQ
How often should I review my books and financial records, so they stay accurate and up-to-date?
It is always advisable to review your financial records periodically to ensure their accuracy and completeness.
A monthly review of financial statements, balance sheets, cash flow statements, and other related documents is recommended.
Moreover, it is crucial to ensure that all transactions are recorded correctly, so they appear accurately in reports such as profit and loss statements or accounts receivable/payable summaries.
If your business experiences rapid changes, more frequent reviews may be necessary to ensure that all aspects are up to standard.
In the case of significant fluctuations in revenue from one month to another, such as seasonality, it might be beneficial to conduct weekly reviews.
These reviews will enable you to track changes more precisely over time and determine the taxes you need to pay as part of running your business accurately.
What taxes do I need to pay as a yoga teacher?
As a yoga teacher, you will need to pay taxes such as sales tax, employer payroll tax, and more. It’s always a good idea to consult with an accountant who will be able to understand specific requirements depending on your state’s laws.
Regular bookkeeping monitoring helps businesses stay compliant with regulations and maintain track of their overall success metrics.
