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Bookkeeping for gyms can be a tedious task. As the owner of the gym, your primary focus is oftentimes on the health and fitness of your clients and not a bunch of accounting numbers and bookkeeping paper. It is most of the time too confusing and time-consuming to properly keep your gym business books. At the same time, it is more than necessary to do it.
Performing the bookkeeping of your gym accurately will help you have meticulous and up-to-date financial information, make better business decisions, remain compliant, and prepare for tax season in advance. In this article, we are going to review some necessary tips you need to know regarding bookkeeping for gyms.
Staying organized throughout the year will eventually help you understand your financial situation when tax time rolls around you. It is highly recommended that you gather any receipts and invoices you use every day and keep them organized. Also, pay attention to the documents on big equipment purchases for your gym as their price tags might significantly affect your financial situation.
Audits normally happen and if you keep all of your receipts and invoices, you will be prepared for them with peace of mind. Receipts can simply show what you have bought for the gym and how much you have spent. For example, if you pay for something by cash, you cannot find the transaction on the bank statement; however, the receipt in such cases can be a lifesaver.
It is never a good idea to use a single bank account both for your personal expenditures and gym financial transactions. When you start your gym, you certainly need to have a separate, specific bank account for it. It may not be a big deal at the beginning when your gym business is small yet and you are not dealing with numerous clients; however, as your business grows, this can make your bookkeeping much more complicated.
Separate bank accounts will avoid the need to repeatedly shift through the expenses to find out which are related to the gym, and which are personal. It will also give you the advantage of more meticulous cash flow management and build stronger credibility and professionalism with your business.
It is no longer recommended that you keep a binder containing all of your gym members’ payment history, as you may provide gym services for countless people. The best approach, in this case, is to have a recurring billing system for your gym.
Recurring billing systems can bill every member of the salon the same amount of money on a monthly, regular basis. This way, you can always get your money on time, unless the member’s card gets declined.
As you are always busy with your gym and fitness-related tasks, you might be less concentrated on tasks like bookkeeping. Most of the time, gym owners do not make their bookkeeping a vital priority, leading to massive disasters later on.
The best solution is to keep your books up-to-date throughout the year. This way, you can have continuous visibility of your gym’s financial performance and predict potential issues beforehand. Also, it helps you make better decisions as you can always have a complete set of financial information about your business. It is needless to mention that keeping your books updated will make your next tax season a breeze.
Instead of waiting for an audit to come, you can do one yourself. It does not have to be professional and complicated bookkeeping for your gym; performing simple, basic tasks such as reconciling your documents can be a good step to start. If you have a bookkeeper for your gym, have them perform more detailed audits before the time comes.
This helps you do all the checks and balances for your gym so you can find out where you are currently at. It makes you ready to answer any questions the IRS may have ultimately.
This is one of the most crucial bookkeeping tips for gyms. You should keep a record of all the equipment you have in the gym, whether big or small, to be able to detect any missing merchandise or detect probable employee theft.
Keeping up with such records also helps you understand the trend and frequency of your purchases. This will enable you to meticulously discover what your gym members need the most, so you can plan for purchasing them beforehand.
The success of your gym business is highly dependent upon your equipment. Since your equipment is a fixed asset and you cannot avoid depreciation, you need to manage and track its depreciation value annually.
Fitness equipment trends keep changing once in a while with the advancement of technology. As a result, it is crucial to keep track of the real, updated value of your equipment so you will be able to sell your old inventories for a reasonable price. This way, you can subsidize the cost of buying new equipment when you need one.
Manual bookkeeping for gyms is never error-free. It is suggested to shift to the newest technologies for your bookkeeping tasks these days to minimize the mistakes. Bookkeeping software can automate different bookkeeping tasks for you and helps you relieve your stress, especially during the tax season.
Less Accounting offers a complete bookkeeping service that helps you manage your gym bookkeeping and finances anytime, anywhere. It is a done-for-you service that allows you to manage your expenses and incomes, keep a record of your gym equipment purchases, and make use of versatile bookkeeping tools.
In addition to the bookkeeping service, Less Accounting also offers self-service accounting software that provides you with a complete package of all the accounting tools you need for your gym. Combined with the bookkeeping service, this software makes you needless of every other tool and software on the market to manage your gym finances and eliminates your risky tax mistakes.