Category: Cash

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Business tips Cash

5 signs you are undercharging

5 signs you are undercharging

Are you undercharging for your services? It can be hard to tell, particularly if you’re in a niche industry or you’re a contractor. Costs have been rising, so it may be time to rethink your own pricing. 

Here are five signs that you might be undercharging: 

  1. Nobody ever questions your quotes - Do all your new clients accept your quotes or charges without asking any questions, requesting a breakdown or wanting a discount? It’s possible they’re delighted to be getting such a great deal. 

  1. You run off your feet but you can’t afford to get help - When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you, your prices are too low – or something else needs to change. 

  1. Your prices have been the same for two years or more - In most industries, prices increase just slightly each year. Leave your prices flat for too long and you’re not keeping up with the market; make sure you review your fees annually. 

  1. You’re overbooked - When business is booming and there’s no room for new clients, it’s time to raise your prices. 

  1. Clients don’t treat you as well as they should - When clients think they’re paying peanuts, they’ll often take you for granted. They don’t see your time as valuable, so they feel free to mess you around. 

What should you be charging? 

Finding your pricing sweet spot could take a little time. You’ll need to do some research, maybe ask around a little, and find out where your competitors are pitching their rates. 

We can help too – if we have clients in similar industries we might be able to give you some indication of typical fees, so give us a call or drop us a note. We’d love to hear from you. 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download my free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

 

Categories
Cash Tax

Extended carry back of losses – don’t miss the claim deadlines

Extended Carry Back Of Losses - Don't Miss the Claims Deadline

To help businesses that suffered losses during the Covid-19 pandemic, temporary measures were introduced to increase the period for which certain losses could be carried back. This is helpful as it enables businesses
to obtain relief for those losses earlier, generating a useful tax repayment at times when the business may be suffering from cash flow difficulties.

Relief is available to both unincorporated business and companies, although the mechanics of the relief is different. To take advantage of the extended carry back period, the relief must be claimed by the relevant deadline.

Unincorporated businesses

The extended carry-back rules apply to losses for the 2020/21 and 2021/22 tax years. Under the rules, unrelieved losses can be carried back and set against profits from the same trade for the three years before the tax year of the loss. The extended rules apply where a claim has been made to relieve the loss against the general income of the year of the loss and/or the previous tax year, and the loss has not been fully relieved by that claim. Losses carried back under the extended rules are set against the trading profits of a later tax year before that of an earlier tax year. Losses carried back under the extended rules are capped at £2 million for each loss-making tax year within the scope of the relief.

If a business wishes to use the extended carry-back rules in respect of a 2020/21 loss, it must claim by 31 January 2023. The deadline to claim relief for a 2021/22 loss under the extended carry back rules is 31 January 2024. Claims are normally made in a tax return, but a stand-alone claim can be made where the claim affects more than one tax year.

Example

A sole trader makes a loss in 2020/21. He has no other income in that year. He makes a claim for sideways relief to carry back the loss against his general income for 2019/20. If he wishes to take advantage of the extended carry-back rules to carry back any unrelieved loss against trading profits of 2018/19 and, where loss is not fully relieved, against trading profits of 2017/18, he must claim by 31 January 2023.

It should be noted that the claim cannot be tailored to prevent personal allowances from being wasted. Where this will occur, consideration should be given to whether it would be preferable to carry the loss forward instead and set it against future trading profits.

Companies

Under normal rules, a company can carry back a loss for an accounting period back one year against the profits of the previous accounting period. Under the extended carry-back rules, losses for accounting periods ending between 1 April 2020 and 31 March 2022 can be carried back up to three years. Losses must be set against the profits of a more recent accounting period before those of an earlier accounting period. A cap of £2 million applies to losses for accounting periods ending between 1 April 202 and 31 March 2022 which can benefit from the extended carry-back. A separate £2 million cap applies to losses for the accounting period ending between 1 April 2021 and 31 March 2022.

Claims must be made within two years of the end of the accounting period in which the loss arose.

Example

A company prepares accounts to 31 March each year. It made a loss in the year to 31 March 2021. Under normal rules, the loss can be carried back against profits for the year to 31 March 2020. If the loss is
unrelieved, a claim can be made under the extended carry back rules to set the loss first against the profits of the year to 3 March 2019 and, if still not fully relieved, against the profits of the year to 31 March 2018.

The claim must be made by 31 March 2023

What are my options? 

Your immediate thoughts are probably ‘great, sign me up!’. However, depending on your business circumstances you need to consider the different options to ensure you maximise this opportunity for your business.  

There are three main options: 

 

  • Make a current Year Claim to reduce your tax bill 

  • Carry Back your losses to receive a Tax Refund 

  • Carry Forward your losses to reduce your future tax bill 

For businesses with large losses a combination of all three should be considered. 

Corporation Tax

The Corporation Tax rate is changing from April 2023, so this must also be considered when deciding if to carry back losses or carry forward. There will be a decision which needs to be reviewed alongside the need for cash now and the want to reduce taxes.

If your business has made a trading loss since April 2020, book a call and let’s discuss the best route to get a tax relief cash bonus back into your business. 

Categories
Cash Finance Function R&D

Spring Statement Update 2022

man with a clock head

Spring Statement Update 2022

As you may have seen on the news, the Chancellor announced his Tax Plan on 23rd March.

Here is a quick overview of the key changes which may apply personally and/or to your business(es):

Employing staff and taking salary from your business:

· The threshold for paying National Insurance Contributions (“NIC”) will be aligned with the personal allowance from July 2022. This will mean employees pay less NIC on their income. NIC will be paid on income over £12,570 (increased by around £3k) from this date. The change is expected to save employees over £330 per year.

· The rate of income tax is planned to be reduced from 20% to 19% in April 2024 provided the UK meets its economic targets.

· The rate of employment allowance given to employers with more than 1 member of staff will increase from 6th April 2022 by £1,000. This means employers’ NIC bill will be reduced by £1,000 next tax year.

Self-Employed Individuals:

· From April 2022, self-employed individuals with profits between the Small Profits Threshold and Lower Profits Limit will continue to build up National Insurance credits but will not pay any Class 2 NICs. This will ensure the first £12,500 earnt is tax free.

· From July 2022, the Lower Profits Limit will be aligned to the personal allowance of £12,570 (to be on par with employed individuals).

R&D Tax Reliefs:

· From April 2023, R&D costs incurred outside of the UK will no longer be eligible expenditure for R&D tax relief. On 23rd March 2022, it was announced that R&D costs incurred overseas are still claimable provided there is a material or regulatory requirement for this work to be carried out overseas.

· Also from April 2023, your business will be able to claim for all cloud costs along with all mathematics as part of your R&D Tax Relief claim. This change will mean more businesses can claim for R&D costs incurred next year and in turn, increases the money they will receive back from HMRC either as a tax credit or reduction in their corporation tax bill.

· Later this year, we expect some further reforms of the R&D tax reliefs to be announced. Further updates will be provided in due course.

Capital Investments made by businesses:

· No changes have been announced to tax relief on capital investments made by businesses as there are currently enhanced tax reliefs in place until April 2023. Later this year, we are expecting an announcement on new tax reliefs for capital investments post April 2023. We will keep you updated on the changes in due course.

VAT on energy saving materials:

· VAT will be cut to 0% on purchases of energy saving materials (a 5% saving) until 31 March 2027. This change comes in on 1st April 2022 and applies to businesses that provide and install energy-saving materials and customers who have them installed in England, Wales and Scotland.

If you have any questions on the changes or want to find out more about tax reliefs you can claim personally or as a business, please contact me

Categories
Cash Finance Function Gym

5 Ways to Grow Your Fitness Business Without Breaking the Bank

5 Ways To Grow Your Fitness Business Without Breaking The Bank

Business growth often requires hefty investment, but there are ways of growing and improving your fitness business without spending a huge chunk of cash. If you’re trying to build your gym or fitness business on a conservative budget, take a look at the following seven wallet-friendly ways to grow your business. 

1. Analyse Your Marketing Efforts 

Fine-tuning your marketing efforts can help you use your marketing budget more wisely and achieve a better return on investment. Take a look at the marketing strategies you’re putting the most money into and work out which ones are driving sales. Tools like Google Analytics can help you figure out where your website traffic is coming from, allowing you to prune the practices that aren’t serving your business and focus on the ones that are achieving real results. Social media tools like HootSuite can also give you a clearer picture of the type of content that engages your audience the most. 

2. Fine-Tune Your Website

Many business owners build a website and then consider it a job done. However, your website should be regularly reviewed, optimised and updated to make sure that it’s delivering the best possible results for your business. 

 

Make sure that your contact information is correct and visible on each page. Strive to improve your loading times – for example, by compressing images – to boost your SEO score. Focus on local SEO strategies to find new customers in your local area and make sure that your site is content rich to attract a bigger audience. 

3. Take Advantage of Trends 

Show your customers that you’re an agile organisation by creating content, products and offers that reflect what is happening in your community and industry. For example, in recent years there has been a rise in micro influencer marketing and a focus on shopping locally due to the covid-19 pandemic. You could capitalise on this by collaborating with micro influencers in your local area, proving that you’re an on-trend business at the heart of the local community. 

4. Upgrade Your Sales Funnel with Content Marketing

If you generate a lot of leads but relatively few sales, then something is going wrong somewhere in your sales funnel. Either you’re not filling the top of the funnel with the right kind of leads, or you’re not nurturing them appropriately to convert them into paying customers. 

 

One key way to convert leads who are not yet ready to buy into paying customers is nurturing them through content marketing. A first-time visitor to your site will rarely make a purchase, so you need to give them a good reason to keep on coming back. When you share content to your audience every single day, you remain front of mind and build trust. Then, when a prospect becomes ready to buy, voila – you’re right in front of them. 

5. Understand Your Finances 

Knowledge, as they say, is power. Gaining a deeper understanding of your business’ finances will empower you to make better decisions and grow your business more effectively. Using cloud accounting software such as Xero can be enormously helpful here, as these programs create easy-to-understand reports and summaries. If you work with an accountant, be sure to consult with them regularly and don’t be afraid to ask questions – a great accountant is not just a number cruncher, but a partner and guide.

Summary 

 

Growing your business does not need to break the bank. Often, accelerating small business growth is a case of fine-tuning practices that are already in place and capitalising on the opportunities that are already in front of you. By working to improve your existing website and sales funnel, you can generate more high quality leads and nurture them to become paying customers via content marketing. It’s also important to remain agile and respond to local and market trends. Finally, it’s essential that you understand your finances so that you can make smart financial decisions that will really benefit your business growth. 

 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download my free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

Categories
Cash Finance Function Gym

Capital Allowances 130% Superpower! Kapow!Invest now or later?

Capital Allowances Super Deduction

Capital Allowances. Invest now or later?

 

Earlier this year, you may have seen in the news – or online – talk of a new super duper 130% Capital Allowances deduction intended to accelerate investment by businesses. AKA the Capital Allowances Superpower! But unless you’re already claiming capital allowances tax relief, this might not mean much to you. But it really should. Why? Well, in a nutshell, the government will PAY YOU to invest in new assets for your business now until 31st March 2023.

If you are looking to invest in your business you should read on….


WHAT IS CAPITAL ALLOWANCES TAX RELIEF?

Capital Allowances is a tax relief which enables a limited company to deduct the cost of capital assets from its profits. The result of this means the tax the company pays is reduced, for the year the claim is made.  

Usually, Capital Allowances are for purchases of assets up to £1m, of which the company can claim back 100% of the purchase cost. It’s already a generous tax relief but now it’s even better…..


HARNESS THE CAPITAL ALLOWANCES SUPERPOWER!

If a limited company invests in a qualifying NEW asset, they can now deduct 130% of the cost from their profits, and the even bigger benefit…there is no £1m  limit on the amount which can be claimed. This is a huge opportunity!

The only BUT, purchases must be made between 1st April 2021 and 31st March 2023, and it only applies to certain new assets. However, the list is long!

Take a look inside the building below and find out the types of items that qualify for the relief, there is everything from laptops, to furniture, to lighting systems…….even toilets!

Capital Allowances Super Deduction

Please note this isn’t an exhaustive list of qualifying assets.

SHOULD I INVEST NOW OR LATER?

If you are a limited company, thinking about buying new business assets, refurbishing or fitting out a commercial property, and your company has cash available to invest in new items before 31st March 2023, you might want to make that investment sooner rather than later.

Specifically, limited companies with profits less than £250k should consider investing now and bringing forward any planned purchases of capital assets. However, this isn’t a decision to jump into without having a clear strategy in place.

 

The rules around Capital Allowances are inherently complex, so if you’re planning to invest in capital assets to benefit from this superpower, we recommend seeking advice first.

Please book in a call with us, and we’ll make sure you are doing this in the most tax efficient way. 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download my free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

Categories
Business tips Cash Gym

Why you should stop competing on price – and how to do it

Man in gym

Why you should stop competing on price - and how to do it

Many fitness businesses compete on price simply because they haven’t contemplated taking another route. The problem is that simply slashing your prices and trying to undercut your competitors can set you on the path towards financial failure. Competing on price often leaves gym owners and fitpros with narrow profit margins and picky customers who are always trying to get something for nothing. Here’s how to stop competing based on price and shift your focus to create a more profitable business. 

So When Should You Cut Your Prices?

When you have a cost advantage over your competitors, it makes sense to compete on price. If you gain an exclusive distribution agreement with a supplier, then you should be able to undercut your competitors without taking a hit yourself. However, this is not the case for most small fitness businesses and so competing on price just means smaller profit margins. 

Ward Off the Vampires

Every business owner has had to deal with a vampire client or customer at some point in their journey. These vampire clients question the price of absolutely everything, but don’t see the value of anything. They are, therefore, extremely difficult to work with and though they may bring in revenue, they don’t generate a significant amount of profit. They want to bleed your business dry. 

 

When you stop competing on price, these vampire clients may fly elsewhere but if they aren’t generating profit, then that’s ultimately a good thing for your business. Instead, you can focus on attracting high value clients and customers who will instead permit your business to grow. 

Start As You Mean to Go On 

During the startup stage, many business owners compete on price because they lack confidence and see selling themselves short as a surefire way to attract business. Unfortunately, this will not start your business off on the right note and won’t bring you the profit margins that you need to grow and expand. Instead, include the fact that you won’t be competing on price in your initial business plan and keep this intention at the forefront of your mind. 

Make Quality Your Selling Point 

Price and value are not the same. If you want your clients or customers to pay more, then you need to communicate the quality of your products or services to them. Take care to demonstrate your expertise to your clients and show up as the solution to their problems in order to earn their trust. 

 

Content marketing is an enormously valuable method when competing based on quality. Through constantly publishing quality content, you not only attract your customers’ attention but present yourself as the hero with the answer to all of their problems. When you use the power of content to differentiate yourself from your competitors, you will receive far less pushback on pricing. 

 

Excellent customer service is another key part of competing on quality. When you outstrip your competitors in this area, your good reputation will grow and the referrals will come flooding in. This not only builds trust, but will lead to repeat business, too. 

Summary

Competing on price is an effective strategy if you have a cost advantage over your competitors but otherwise it will most likely lead you towards financial uncertainty and even lower the quality of the products or services that you provide.

 

It’s difficult to stop competing on price once you have begun to do so, so always start as you mean to go on and compete based on quality and excellent customer service from the beginning. 

 

However, if you have already started your business then it is possible to change your approach. Re-evaluate your marketing strategy and focus on quality, rather than low prices. In the long term, this approach will prove much more beneficial for your business.

 

 

 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download my free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

 

 

Categories
Business tips Cash Gym

7 Most Common Money Mistakes for Gym Startups to Avoid

7 Common Money Mistakes for Gym Startups to Avoid

Smart financial management is essential for any business, no matter how big or small. However, it can be difficult to get things right, especially during the startup stage. Poor financial planning is one of the most common reasons that startups fail, so the sooner you take ownership of your business’ financial health, the better. Dealing with your finances head-on from the get-go is the best way to set yourself up for lasting success. Careful planning can help you to avoid common money mistakes and shows potential investors that you’re serious. Here are the most common financial mistakes that startups make and how to avoid them. 

1. Prioritising Instinct Over Information

Whilst following your gut is generally a good principle, it’s a dangerous game to make assumptions about your finances. It’s vital that you meticulously track your revenue and expenses and closely monitor your cash flow. If a small mistake goes unnoticed for too long, it could prove very damaging for your business. During the startup stage, using an Excel spreadsheet will suffice but be prepared to upgrade to bookkeeping software later on. 

2. DIY Accounting 

Managing your accounts by yourself will suffice for the initial setup of your business, but it’s wise to hire a professional accountant as early as possible. Juggling self-taught accounting with running a small business will eventually result in a backlog of errors, which can prove costly. Professional accounting services save time, money and stress, allowing you to focus on growth. You don’t need to hire a whole team. Start by outsourcing your taxes or setting up quarterly meetings with a financial consultant for help and advice. 

 

Here is another article that explains why you don’t think you need an accountant for your gym business: https://debbiebaileymoney.co.uk//do-you-really-need-an-accountant-for-your-gym-if-you-use-xero/

3. Failing to Assign Project Budgets 

Assigning a budget to a project prevents it from draining your finances should something go wrong. A clear budget will allow you to reassess your finances should the project require more money and make smart decisions that won’t damage your business. 

4. Disorganised Files

The importance of balancing bank statements and keeping receipts in order cannot be overstated. Patchy bookkeeping can cause chaos for your business and result in a lot of trouble, not to mention wasted hours trying to resolve the problem. Keeping all of your receipts and cross-referencing your accounts with your bank statements is vital for transparency and future success. 

 

5.  Misunderstanding Your Target Market 

In order for your business to be successful, you need to understand what your members need. Knowing your target market helps you to reach them, as well as how to appropriately price your products and services. Here are some questions to consider:

 

  • What is your market position?

  • What need do you fulfil for your members requirements? 

  • How much value do your products or services provide?

  • Who is your competition – and what makes you stand out? 

Miscalculating prices can prove to be a grave error for a gym, but knowing your market well will help you to figure things out.

6.  Hiring Quantity Over Quality 

Over-hiring is an expensive mistake to make. Hiring employees is one of the most costly parts of running a business, so going overboard is a huge waste of money. It can also damage staff morale and productivity, and lay-offs further down the line will only amplify the problem. 

 

Bad hires are another threat to a small business. Hiring the wrong employee can create an imbalance within the company culture. In turn, this can negatively impact other staff and even damage your business’ reputation. Don’t rush the hiring process. Taking extra care to avoid mistakes can save a lot of trouble in the long run.

7. Miscalculating Expenses

In order to keep your business afloat, you need to know exactly how much cash your gym burns each month. Keeping a meticulous record of your expenses allows you to understand where your money is going, and how much you’ll need to survive. Underestimating your cash burn can land your business in hot water, so create a projection of your monthly expenditure and be sure to monitor it closely, making adjustments whenever necessary. 

A successful gym or fitness centre needs a strong financial foundation, so keep these mistakes in mind. No business is invincible and it really does pay to be cautious and always stay one step ahead. 

If you would like some support in avoiding these mistakes then please book a discovery call below:

 

 
Categories
Cash Gym

5 Simple Ways to improve the cash in your startup business

Man in gym

5 simple way to improve cash in your start up business

Cash is king in business and good cash flow management is essential for the success of your startup. Think of cash flow as blood flow and you’ll understand just how vital it is to the health of your business; without it, you’ll die. That sounds bleak, but it really is important to manage your cash flow well from the very beginning and protect your business against any problems along the way. 

 

Even if your business is very profitable, you’ll struggle to cover your costs without sufficient funds available. However, at the same time, an excess of cash suggests that you’re not re-investing enough into scaling your business. Finding a balance takes accuracy and attention, but it can be done by following the steps outlined below. 

1. Regularly Prepare Cash Flow Statements 

Before you can start planning for the future you need to get a clear picture of where you are right now. This is where cash flow statements come in. A cash flow statement provides an overview of how much cash is coming in and going out of your business. This then allows you to perform a detailed analysis of the financial health of your business.

 

A cash flow statement requires a lot of data and so a cash flow calculator can be very useful in helping you prepare this document. You also might want to think about hiring an accountant to ensure that your statement is accurate, since getting this wrong can lead to bigger mistakes down the line. 

2. Create Cash Flow Projections

It’s important to understand what your cash flow is likely to look like in the months to come so that you can plan ahead and manage your finances wisely. Realistic cash flow projections can help you to invest your money at the right moment and account for any potential pitfalls along the way. This process can be time-consuming and complex, so again it’s worth using accounting software or enlisting the help of a professional. These projections are incredibly valuable when it comes to scaling up your business and so they’re worth investing in. 

3. Prepare a Safety Net 

Any entrepreneur will tell you that it pays to have a safety net, particularly when you’re scaling your business. Investing in growth can lead to short-term negative cash flow which is perfectly okay, so long as you’re prepared for it. A cash reserve will help to smooth things over when you’re having cash flow problems and ensure that you have enough funds available in order to pay suppliers and staff. It’s also worth investigating whether a line of credit could be beneficial to your startup to help you keep operations going when cash runs dry. 

4. Plan For the Long Term 

As important as it is to have a handle on where you are right now, your business won’t be this way forever. After all, the ultimate goal is to grow out of the startup stage – and this means big financial changes. Furthermore, there are many factors outside of your control that could affect your cash flow in the future, such as inflation, recession or late payments from clients. It’s always best to be prepared for the worst so that your business is protected against any eventuality. Take some time to research and forecast potential changes in market conditions that could impact you in the future. Again, it’s worth consulting your accountant for advice that could help to protect your business.

5. Stay On Top of Invoices 

It’s important to manage cash inflow effectively and sadly, you can’t just bank on customers always paying you on time. You need to ensure that you send invoices in a timely manner, set clear payment deadlines, send reminders and chase up late payments. If you have a large customer base, this can be a time consuming process and it may be worth looking into accounting or invoicing software to take care of this for you. Not only does this help you to manage cash inflow accurately, it also frees up your time for more valuable pursuits. 

Cash Flow is Key to Your Success

There’s a lot to think about as an entrepreneur but managing your cash flow well is one of the most important ways of ensuring the financial health of your business. Not only does this help you to protect your startup against market changes and late payments, it enables you to invest your money wisely and at the right moment. Good cash flow management isn’t just about protecting your business from collapse, it’s also vital to help your startup to grow and flourish. 

 

 

 

Categories
Business tips Cash Finance Function Gym

What are the benefits of paying by direct debit?

Cloud Accounting - Xero

Why direct debit is beneficial to you

When deciding which accountant best suits your business, understanding how you will be charged for those services may be a key component. Will you have one large bill after the accountant has finalised your accounts and will you know when this might be?

Even though the cost of working with me is different for every business, the way every business pays is exactly the same. This is because it comes with massive benefits to their business (and also to me). 

I use an app called GoCardless for the direct debit collection, that is because it is secure and works really well. There is a cost associated with it but I absorb that cost, so you don’t need to worry. 

Direct debit will give you peace of mind, save you time and spreads your cost:

  • It is one of the safest and most convenient ways of paying your invoices

  • Payments are made automatically so you never forget (don’t worry I cannot and wouldn’t take a payment without your agreement)

  • You can spend more time doing the things you want, knowing that your invoices are being paid without any involvement from you

  • Every business must go through a vetting process

  • It is all handled online, so protects the environment and reduces waste

  • The cost is spread across 12 months, which helps your cash flow and helps you forecast and budget going forward. 

  • Direct debit is highly secure and fraud is highly unlikely

GoCardless is really easy to set-up, the link will be included in the first onboarding email and takes minutes to do. It works seamlessly with Xero which I use with my clients. 

You may already have used GoCardless as it is a popular method for collecting payments and does link in with gym management software such as ClubRight. 

By using direct debit, it means that when life gets in the way, we will never have to have the awkward conversation about unpaid invoices, this reduces your stress so you can concentrate on building your business. 

If you want to understand how I price accountancy services then click here: https://debbiebaileymoney.co.uk//how-much-does-accounting-cost-for-gym-owners/

 

1. Book a call with me: https://debbiebaileymoney.co.uk//contact-us/ 

2. Download my free guide on “7 mistakes to avoid – to stop your fitness business running out of cash” https://debbiebaileymoney.co.uk//fitness-ebook/ 

3. Connect with me on social media: 

 

 

 

Categories
Business tips Cash Finance Function Gym

5 common accounting mistakes that could hurt your gym business

5 common accounting mistakes that could hurt your gym business

Many gym and fitness centre owners – especially those just starting out – tend to handle their own accounting and bookkeeping. However, keeping track of the finance-side of the business– everything from income to expenses to tax compliance– can be overwhelming.

Mistakes can happen quite easily and can have costly consequences to your business, especially as the business grows. Below are five of the most common DIY accounting errors that you should avoid.

Unorganised Records

It takes excellent organisation skills to be able to do your bookkeeping and accounting right. You would need to keep a record of every transaction, keep receipts or digitise them for future reference, calculate taxes accurately, and more. If your records are not kept organised and updated, it is highly likely that you’ll miss something out, which could get you into trouble during the tax season.

To help with this using an accounting system such as Xero is really the way forward. You can access your records anywhere, you can connect it to your gym management software or upload CSV files to Xero, this will give you up-to-date information. Plus it means when you do seek support from an accountant/virtual finance department you will not be restricted by location.

No Accounting Schedule

As a business owner, there are surely a lot of other things that you need to attend to and accounting can easily be pushed to the bottom of your seemingly endless To-Do list. Yet, it is extremely important to set an accounting schedule to add your recent income and expenses into your records. If daily updating is not possible, at least dedicate some time once a week to do your accounting.

Unreconciled Accounts

Regularly check if your bank account reflects the same balance as you record your cash flow and other financial data into your books. If you find a gap, there is likely a mistake somewhere that you need to find or even a fraudulent transaction. Taking immediate action will help you prevent worse problems further down the line. Even if you use bank feeds into your accounting software, it is not guaranteed that transactions will not drop out or duplicate. So by checking your bank balance regularly against your accounting system you can feel comfort in knowing everything is being correctly captured.

Failing to Take Into Account Small Transactions

It can be easy to forget about minor transactions such as the office supplies that you picked up on your way to the office or the freebie that you sent a loyal customer. However, no matter how small you think the transaction is, it’s important to keep a record and get a receipt. In case of a tax audit, you will need to be able to present records of ALL business expenses, even these small ones. This is why I would recommend using a tool such as Hubdoc, Xero expenses or receipt bank, you can then quickly take a photo of the receipt, upload it and not have to worry about losing the receipt.

Not Backing Up Data and Using an Accounting Software

Imagine if the laptop where you store all your financial data was stolen, lost, or broken beyond repair and you don’t have a back up. You would need to redo everything from scratch, which could be a huge waste of time.

If you’re still using a spreadsheet or paper ledger to keep track of your business finances, you might want to consider upgrading into a cloud-based accounting software such as Xero. By migrating to the cloud, you will be able to easily back up your accounting data and even access them wherever and whenever you need to.

These cloud-based accounting systems also integrate well with your bank account and other powerful business apps. The results are streamlined processes, less manual work, enhanced efficiencies, and better overall business performance.

Spend Less Time on Your Books and More Time on Your Business

While being aware of these common accounting mistakes could help you avoid them, the most convenient and efficient approach to stay on top of your business finances is still to entrust your accounting to the experts. Our team of experienced accountants can integrate the most suitable cloud accounting software for your business and even train your in-house staff on its proper implementation.

Let us take charge of your books, while you focus on growing your business. Get in touch with us today.

 

 

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