As an accountant who has experience working on books of small businesses, I have encountered certain common areas where accounting problems could be avoided. Bookkeeping is often not an important function for so many small business owners, but when it comes to borrowing money, growing a business, or selling assets, many small business owners- and particularly personal trainers- encounter pitfalls as a result of not keeping up their accounting records.
Here are FIVE tips for personal trainers to avoid possible problems in the future
Keep Track of Sessions and Money Earned
Lots of personal trainers don’t keep adequate track of the clients they are servicing on a monthly basis, particularly those clients who pay cash. While it might be tempting to overlook time tracking, it is not advisable for many reasons. First, the IRS requires reporting of all income. But ethics aside, if there ever comes a time when you need to bring in a partner or borrow funds from a lender, appropriate tracking and recording of sessions and money earned is crucial. When it comes to your ability to borrow and how to value what you’re worth, how many clients you service and how much money you bring in is pertinent to your future success.
Maximize Your Time and Your Rates
Do you charge a session or hourly rate and believe that this is what you are earning? If so, you are missing a crucial step. Your hourly rate is really what you earn after you back out expenses.
Here is an example: Let’s say you charge $50 for an hour session. You might think this is a solid number and maybe you even boast that it’s above-market and clients pay you more for your services. So if you work 20 hours a week, that means you earn $1,000 a week, right? Wrong. When you factor in expenses, it might look like this: let’s say you pay $300 a week in rent; $20 a week in fuel costs to drive to work; and $100 a week in added expenses, like your phone, heating costs, water, and miscellaneous office expenses needed to run your facility.
That means your weekly costs are $420 a week. Well, $1,000 less $420 is $580 a week. Divide that by the 20 hours you work, and you actually earn $29 per session. Having a bookkeeper can help curb some of that cost so that you can focus on earning more.
Avoid Costly Professional Fees
Do you find yourself scrambling come tax time, organizing your receipts and throwing everything together in a haphazard way for your accountant? Or maybe your accountant has filed your taxes, and then you realize you forgot to include a major expense? In either of these scenarios, your tax accountant is eating valuable and often expensive time to take corrective actions. You find yourself with a huge bill to the accountant and wonder what could have been done to avoid this. Having a bookkeeper year-round is the answer. And at the end of the year, everything will be organized and included so that all your tax accountant has to do is draft your tax documents, saving you valuable time and money.
Know Your Tax Breaks and Whether You Overpay Taxes
This is a pretty big one for personal trainers: do you know what you could be deducting for taxes? How about all of those start-up costs whose receipts you still have, like marketing materials, business cards, etc? Fitness equipment that you purchased, training classes and study materials for certifications, computer software….there are many costs that as a personal trainer may be deductible to you if properly recorded and documented throughout the year.
For every $1,000 in expenses, you could reduce your taxable income by about $350. Don’t wait until year-end to think about what these costs might be- keep track during the year, as soon as the expense is incurred so that you don’t leave any money on the table.
Gym owners and personal trainers are leaving a lot money on the table every year. This is why I created First Choice Solutions Bookkeeping. I take care of the debits and credits and let them do what they do best, service clients and help make people healthier.
If you would like to learn more about my services and how you can start saving money by handing your bookkeeping tasks to a professional please contact me at email@example.com or Call 772-202-3524