As a gym owner, you may be able to handle some of the day-to-day tasks related to running your business, such as preparing invoices or tracking taxes. However, if you are still operating a small business yourself, then accountants can do these things much more effectively.
While it may not be necessary for larger businesses, there is no reason that owners cannot take on these responsibilities themselves.
Gym owners who sell a greater number of subscriptions will need to employ an accounting firm to keep track of their finances. This can be a time-consuming task that is best left in the hands of professionals, so it’s always advisable to use an accountant when starting or running a business.
What is accounting for gyms?
Accounting is the process of recording and summarizing financial information to ensure a company is in a healthy financial position and follows accounting rules. Bookkeepers have a good understanding of how to maintain books, prepare tax returns, and check the accuracy of financial statements.
The owner of a small business may not have had formal training in accounting but has the basic bookkeeping skills needed to run the business.
This can make it hard for some business owners to figure out how to spend money and manage finances if they do not have someone to help them who has better knowledge of financial concepts and practices.
How to do accounting for gyms in 7 steps
We’ll walk you through each step to understand the basic accounting process to manage your finance properly.
Find the most suitable accounting software
Accounting software is a tool that can help you keep track of your business finances.
Studies show that businesses that use accounting software are usually more profitable and have more cash flow. It also helps reduce the time spent on accounting tasks by 34%.
We researched the options available to gym owners and discovered some strategies that might help.
Record entries as soon it happens
A record is a list of information that you enter into your computer. A log is another name for a record. Every time you do something on your computer, a record of that activity is created and stored in your computer’s memory.
The accounting program will keep track of the invoices that you send out and the payments you receive from clients. It will also calculate your profit and prepare financial statements based on your input.
Record every transaction as soon as it’s done to ensure the accuracy of the records.
Record the cost of goods sold (COGS) to ensure a healthy company’s operations
COS is a metric used to measure the total cost of inventory that has been sold, including original costs plus any additional expenses (like shipping and handling) incurred while selling them.
Understanding the actual costs associated with a company’s operations, this information can provide a more accurate picture of its financial performance.
Adding products and services to the accounting system will calculate your COGS based on the invoices you create.
A chart of accounts can help you keep track of your finances
A chart of accounts is an important tool for tracking financial activity within a business. This document will show how much money has been spent on salaries, rent, and other expenses, as well as what revenue the business has generated.
The chart of accounts in a gym owner’s business would detail all the money earned from sales, what expenses were incurred to produce the food, how much was spent on rent and salaries, what assets (like ovens and machines) were acquired by the business, as well as any leftover cash.
After that, the business might have to give some of that money back to shareholders (called equity) or keep it all (called retained earnings).
Automate the accounting process to save more time
Automating the accounting process can save time by automating tasks that are cumbersome, like reconciling accounts, issuing invoices, and paying salaries.
Automating the accounting process can help businesses reduce their workload by up to 50%. One such software tool is invoice processing software, which helps streamline the receipt and payment of invoices. This program reduces the time it takes to process these documents manually by as much as half.
Hire an accountant
Accountants can help you manage your business finances by setting up automated processes that will automatically collect and distribute funds. This eliminates the risk of fines or penalties, which can be costly in the long run.
An accountant can help you keep your business finances accurate and organized, making it easier for you to manage them. It’s a good idea to have one on staff if you don’t have the time or inclination to do this yourself.
Best accounting agencies for gym owners
In order to choose the best accounting firm for your needs, you should consider looking into some of these good options.
1-800 Accounting Agency
1-800Accountant is a New York-based accounting agency specializing in small businesses. The company offers affordable services starting at $0 to $375/month.
Accotax Accounting Agency
Accotax is a London-based accounting agency that works internationally with small businesses, partnerships, and other business types.
Its pricing is perfect for startups and self-employed individuals, 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 gyms
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 track business transactions
Accrual-based accounting is a method of bookkeeping that recognizes revenue and expenses when they actually occur, as opposed to when money is exchanged. By doing so, businesses can more accurately monitor their financial performance over time.
Accounting that utilizes accrual-based principles helps businesses understand their financial position over time, providing them with a more accurate picture of how much money they will likely have to spend in the future.
This allows for more efficient budgeting and planning, knowing that unexpected costs may come up sooner than anticipated.
The audit process ensures that a company’s financial statements are accurate and follow Generally Accepted Accounting Principles (GAAP). This helps investors evaluate the company with other companies in the same industry.
Learn Tax basics
Businesses are often required to file forms such as the 1120S and 990T in order to report their income and expenses. It is important to consider any credits or deductions that may reduce the amount of taxes owed since these filings can be complex.
Taxpayers can deduct a variety of expenses on their taxes, such as mortgage interest payments, charitable donations, and medical bills.
Credits are financial benefits that are typically given to individuals with the goal of encouraging them to spend money in a specific area. Common credits people may take advantage of include child care costs earned income credit, and student loan interest deductions.
It is important to report all sources of taxable income on your tax return, as you may be subject to penalties if you are later audited by the Internal Revenue Service.
Each state has its own tax laws and filing deadlines, so be sure to consult those before April 17. Additionally, pay attention to any special tax rules that apply to your state.
Keep your business bills
Managing business finances can be a difficult task, but it’s important to have a system in place. For example, you can set up an online payment system that allows you to pay bills quickly and easily. Melio is an excellent example of such a system.
These reminders can help you avoid missing payments, and automating your payments can save you time and money in the long run.
Reconcile your transactions
Reconciling helps you make sure that all the financial records in your accounting system are accurate and up-to-date. It also allows you to identify any discrepancies or errors, so someone can quickly rectify them before they become a problem down the line.
To reconcile a debt, gather all relevant documents, including bank statements, invoices, and receipts.
Next, enter each transaction into the online banking feature; it will download transactions from your bank account. Verify against associated paper trails documentation such as invoices and receipts if something is not correct.
Create a business bank account
As a business owner, it is essential to set up a business bank account. A separate account helps you keep track of income and expenses and ensures that you are paying taxes properly.
The company’s insurance policy protects it from financial liability if something goes wrong. Before starting a business bank account, consider the steps involved:
- Decide what type of entity your business will be (sole proprietorship, partnership or corporation).
- Research different banks to find one that best fits your needs by gathering all necessary documentation (articles of incorporation or DBA forms; proof of identity; etc.).
- Make an initial deposit into new accounts so they can be activated immediately.
Setting up a dedicated banking solution for small businesses is quick and easy, and it will help ensure that all funds related to the business are tracked efficiently and avoid any potential legal issues down the line.
Accounting for gym owners FAQ
How often should I review my books and financial records, so they stay accurate and up-to-date?
It is important to review your books and financial records regularly, so that you stay accurate and up-to-date.
Monthly reviews include financial statements, balance sheets, cash flow statements, and any other documents related to finances.
It is also important to make sure all transactions have been properly recorded so they appear accurately in reports like profit & loss statements or accounts receivable/payable summaries. If your business changes rapidly, you may need more frequent reviews to ensure that all aspects are up to par.
For example, if there are large fluctuations in revenue from one month to the next (such as seasonality), it might be helpful to have weekly reviews in order to track changes over time more accurately–this way you’ll know exactly what taxes you need to pay as part of running your gym owners’ business
What taxes do I need to pay as part of running my gym owners?
As a gym owner, you will need to pay taxes such as sales tax, employer payroll tax, and so on. 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.