Tag: gym

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Finance Function Gym

How much does accounting cost for gym owners?

How much does accounting cost for gym owners?

This must be the most common question I am asked and let’s be honest we all expect that answer to be available at the click of a button nowadays. However, I will liken it to when you got a price for your gym fit out, you did not receive an out of the box price, as every gym is unique, and every gym owners’ vision and dreams are different. The price would have been dependent on the size of your space, the type of equipment you wanted, what services and experiences you wanted your members to enjoy.

I realise that not having prices on my website could make you think I am hiding something and fill you with anxiety about jumping on a call with me, it might even distract you during the call as you are waiting for price at the end. So even though I cannot give you a price, as my fees are tailored to each individual business and their needs, I wanted to talk you through the process and give you an understanding of how I price.

Firstly, I just wanted to advise that I only work with businesses who either use Xero or are prepared to move across to Xero. This is for your benefit, as it means you can seamlessly access your finances, no matter where you are. It can be accessed via any device, enabling you to check your bank, pay invoices and use the app to take pictures of receipts on the go, saving you time. 

The investment in moving your accounts to me will be dependent on a few things:

·       To start there is a minimum monthly fee of £100 and this is for the smallest of businesses and minimal service level. This is because under this level of investment I would not be able to provide the level of service you need, to have up-to-date accounts and information for you to make informed decisions. 

·       Turnover level/size of business, this because the bigger the business the more work I need to do.

·       Number of transactions and how frequently you require the bookkeeping to be updated (weekly or monthly). This is due to the level of work involved. 

·       Number of employees on payroll. Does that mean if you get an additional employee that the cost would go up? Yep, the price will increase, just as I would expect you to charge for additional services.

·       Whether you have an in-house finance team or bookkeeper maintaining the records or whether you would like me to complete the bookkeeping. Bookkeeping is a highly skilled role, which takes years to learn and requires continuous development. Therefore, when you invest your bookkeeping with me, the actual fees you pay are lower than a business who needs constant checks. 

·       Frequency of management reports and forecasts, due to the level of work involved every month or quarter to review the information and produce advice. 

·       Requirement for cash forecasts and management of cash forecasts, some businesses have an annual cash forecast, whilst others upgrade the service to include a regular review and adjustment with me. This requires a greater investment of preparation and review. 

·       Strategic advice and 12 monthly goals/business plan, this is a service that provides a greater level of business support, with the business owner working with me to establish their goals and create a plan which is monitored. 

·       I offer a “quick query” service which means you don’t need to worry about asking me those little questions you have, you can ask me quick (10 min) questions without incurring any additional charges, this service is included free as standard. 

You pay Xero and invite me in, Hubdoc is part of the Xero subscription so you will receive access to that for free. As mentioned above I only work with Xero as it works so well for businesses and gym owners. Xero allows you to seamlessly access your finances, no matter where you are. It can be accessed via any device, enabling you to check your bank, pay invoices and use the app to take pictures of receipts on the go, saving you time. 

Any additional work which takes longer than 10 minutes or requires additional research will be chargeable, this will always be discussed beforehand and added to the service agreement and priced accordingly, but don’t worry I will not commence any work without discussing with you beforehand.  No surprise bills!

If you sign up part way through the year, this will create an alignment fee which is payable at the start or can be spread over 3 months. This is because the annual fee is spread across 12 months and if you join after say 7 months, certain elements such as annual accounts fees will need to be caught up. After that going forward the annual amount will be spread across 12 months and charged as a direct debit, as I found that business owners prefer to spread the cost evenly across the year, so they can budget and manage their cash. There is no large bill at the end of the year to pay. 

Any examples of price then?

So you are still none the wiser about cost! Well, I can provide some examples which will help this.

Gym requiring accountancy work (all prices are per month)

Turnover of £500k per annum, payroll for 5 employees, VAT return submitted quarterly, annual accounts, tax and confirmations statement submitted, 1 directors tax return and 200 transactions a month to be reconciled (by me):

This would be £468pm 

If you wanted to add a quarterly zoom meeting it would be £37pm and a set of quarterly management accounts would be £92 per month. 

Larger gym requiring finance director support: (all prices are per month)

Turning over £1m per annum, all bookkeeping and compliance work (accounts, tax, VAT, payroll) is handled by an in-house bookkeeper and an external compliance accountant. The business owner wants to grow the business and make more profit, ultimately to be able to take more cash from the business and take the family on holiday. They are looking for a part-time finance director as they don’t need and cannot afford a full time finance director. 

I will provide monthly management accounts, an annual cash forecast and monthly management meetings which involves going through the accounts, providing advice and answering any questions the business owner has. Together we will look where improvements can be made, costs saved and profit increased.

This level of support would require an investment of £615pm 

As your business changes the level of service you require will change, so I wanted to outline the frequency with which we review the service levels:

1)  Payroll and software fees are reviewed every month

2)  Bookkeeping every quarter

3)  Account fees annually, providing you with an update 3 months prior to the year end.

4)  I have the option to increase fees annually by up to 5% to account for inflation.

 

The monthly invoices are updated going forward to reflect any changes, this will be discussed with you before hand.

There is no need to worry about direct debits being taken without prior notice. 

Monthly invoices are sent on the 1st of each month, which are payable by direct debit. This is set-up, so you don’t need to worry, GoCardless will process the payment on 15th of month. It doesn’t require any input from you and will be the same amount every month as agreed in the proposal (unless there is an agreed adjustment due to a review). 

It is impossible to calculate a price without speaking to you, finding out what help and support you need, what support you already have and how frequently you want certain services. That is why we have the initial discovery call to decide if we are both a good fit and then a second call to go through the services, frequency etc to calculate the price.

As a business owner it’s critical to look at your accountancy fees as an investment rather than a cost. 

An accountant is someone who can help your business progress, help you increase your profits and reduce your stress, giving you back time to do what you want. By investing in an accountant you are giving yourself a chance to experience this, a cheap once a year accountant won’t be able to provide that. 

To understand what your price would be, contact me for an initial 15 minute free discovery call and if you decide to move to a proposal then I will provide the price. 

 

I will provide you with a proposal which clearly outlines the price and services included, as well as the additional services you may wish to consider in the future as your business grows.

 
 
 
 
Categories
Business tips Gym

You use Xero in your gym business, so do you really need an accountant?

Do you really need an accountant for your gym business if you use Xero?

So, you have cloud accounting software in your gym business, your bank (or gym management software) feeds into the accounting software and the software makes suggestions for where to reconcile the bank. Therefore you feel like an accountant is a waste of money and confused about what they can offer to your business. 

Masses of information is available online via websites such as Xero guides and HMRC website, if you have the time, you think you can do it yourself. Why would you need an accountant then?

It is a fair question as when you are starting out, you will be looking to save money. Plus, you assume the software does all the work, so what is the accountant actually doing? Seeing the value might be a lot harder than seeing the value in a Facebook ad campaign or purchasing a new piece of equipment to dazzle the members.

If you ask other gym owners if you should have an accountant you will get a mixed bag of “No, it is easy, just a few clicks of a button” and “Yes, my accountant saved me hundreds in tax alone”.

So, as an accountant, I wanted to go through the reasons why your accounting software does not do everything you think it will and reasons why Xero alone is not the solution for you.

Why your gym business needs an accountant:

1.    Risk – you don’t know what you don’t know. Taxes are complicated and sometimes can appear a bit grey, so it takes years of learning and maintaining to do this well. Your mistakes are likely to be costly.

2.    Time – How much is your time worth to your business? For every hour that you are working on your accounts, you are not working on your business. 

3.    Stress – Do you enjoy keeping the accounts up to date and then worrying that you haven’t done it right? You may spend an hour a week completing the accounts but then spend an additional hour worrying that it isn’t quite right.

4.    Complication – Accountancy is still complex, whilst the software is always learning, it can learn the incorrect thing if you make a mistake. This can be complicated and costly to unravel. 

5.    Strategic advice – the accountant will be able to provide strategic advice on your future goals and identify opportunities to make more profit. Often when you are too close to the business it is difficult to see.

6.    Tax planning – with tax most of the benefits come from forward planning – how to extract funds from the business, how to reduce your tax bill, how to plan for the future with pensions and inheritance tax. It is impossible for you to do this, as you don’t know what you don’t know.

7.    Cost – an accountant is unlikely to sign off accounts that they have not prepared, so if you would like an accountant to submit your accounts, they will charge for the checking of the information.

I know an experienced gym owner who completed their own accounts and assumed as they had used an accounting system and that accounting system had suggested the entries that it was correct. When I questioned what stock they had, (as there were thousands of pounds on the balance sheet), they didn’t know how to respond, they said all they had was a few protein bars. The accounting system had made an assumption and the owner had agreed that assumption, it continued to make the same mistake. This led to a smaller loss being claimed than should have been.  

Reasons why you think you don’t need an accountant for your gym business:

·       Small gym – You have very basic transactions, only a few members and your bank feeds directly into your accounting system. Due to low member numbers you have the time to prepare the accounts with the help of the software guides. But even at low levels you can still make mistakes, do you know the difference between depreciation and capital allowances? Why does it matter where you code that drink you gave away to a member? 

·       Accounting background – you have either had some accounting training or held a junior accounting job – so you understand the basics of accounts. This will help you in the short term but did you really start your gym business to do accounts? Or did you start it for your love of fitness, weight lifting and helping people live longer lives?

·       New business – this will mean you don’t have the complications of inputting opening balances into the accounting system, uploading suppliers and client details. However, do you know how to set up the chart of accounts to capture the costs in the right place? Have you considered if going VAT registered could be beneficial to you? Getting the right foundations from the start will mean less stress and time wasted as you grow. 

·       Gym management software – your gym uses gym management software so you won’t need to register all your clients into your accounting software. You will still need to ensure the transactions are coded correctly in the accounting system. I took over the accounts for one business that wasn’t correctly accounting for VAT as they didn’t separate out the products/services at 20% from those at 5%. 

·       Below VAT threshold – you do not have the added complication of VAT rules and what VAT percentage you should be charging on the different products/services you offer. Registering for VAT is not a bad thing, it shows your business is growing, plus it may be beneficial to register for VAT even if you haven’t hit the threshold. Think of the 20% tax you pay on all that fancy equipment. 

·       Online help – Xero provides help guides and videos and HMRC have a whole host of information you can use. If you have the time to learn, then this could be a way of bootstrapping at the start. But bear in mind that Xero is not a person who is looking at your particular situation. They are leaving the decisions up to you. 

·       MTD – Xero is set-up for making tax digital and shows you a VAT report. VAT payments and refunds can be automated. However, as I mentioned above, mistakes can still be made. Xero will show you the VAT report with the information you have entered, but if that is not correct the VAT report will never be correct. 

·       Risk – You may pick the wrong accountant. Deciding which accountant to work with is a serious decision, that I know you won’t take lightly. It is important to speak to the accountant and see if you speak the “same language”, that you feel comfortable with them and that they have experience to help you. 

Here is why your gym business needs an accountant:

Not using an accountant can be likened to novice gym members going to your gym for the first time. They can work out the running machine on their own, they can copy the person before them, they can try to read the instructions provided. But unless they have an induction and on-going support they will not be able to do much more than that, at least not safely. 

There are lots of things they don’t know, so they attend their induction and your team offers advice and guidance during the day. The member may then pay for PT sessions to help build a plan and learn techniques. Sure, they could watch you-tube videos until the early hours and work out how to do it themselves, but they will probably never quite reach their goals. Their lifting technique will never be quite right as it’s hard to judge yourself.

For these reasons I recommend that you take a practical approach to your gym accounts:  do what you have TIME to do BEST and pay someone to do the REST.  If money is tight and time is plenty, then do more of the bookkeeping yourself.  Once your business reaches the point where your time is more profitably spent doing something (anything) other than bookkeeping then delegate that aspect as well.

 

Here are a few blogs that you can use now to start making decisions for your gym business:

Should you voluntarily register for VAT? https://debbiebaileymoney.co.uk//should-you-voluntarily-register-for-vat-for-your-fitness-center-gym/

 

5 common accounting mistakes that gym businesses make: https://debbiebaileymoney.co.uk//5-common-accounting-mistakes-that-could-hurt-your-gym-business/

 

7 signs that your business is leaking profit: https://debbiebaileymoney.co.uk//7-signs-that-your-business-is-leaking-profit/

 

A list of 32 ways to get value out of your business: https://debbiebaileymoney.co.uk//32-ways-to-maximise-extracting-value-from-your-business/

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.

 

 

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

2. Download our 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 Finance Function Gym

How can gym management software help your business grow?

How can gym management software help your business grow? 

 

Whether you own a fitness facility or are considering opening one, choosing the right gym management software is key. Gym management software is not only for gyms but also, fitness studios, clubs, PT’s, dance studios, yoga studios, personal trainers etc.  

 

It offers an all-in-one software solution to run your business efficiently. As a fitness entrepreneur you often end up wearing many hats – marketer, accountant, sales person, administrator and everything else in-between. As your business grows you will find these hats harder to juggle, so why not let the software do some of the heavy lifting. 

 

Typically, you would expect the software to have features such as membership management, class bookings, payment processing and provide useful reports and insights. Some fitness businesses will start with a spreadsheet but this will quickly grow messy and can result in a poor member experience. If this sounds familiar then now may be the time to consider the benefits a gym management software solution offers, it can save you time, reduce your stress levels and improves customer satisfaction and importantly retention! We all know that customer acquisition and retention are the bread and butter of growing a successful fitness business.  

 

When deciding on what features the software needs to offer, it is important for you to assess your business needs, ask yourself: 

  1. What is my 5-year plan for the business – is it to grow?  
  2. Do I require my system to integrate with other software solutions such as video sharing, accounting systems, payroll systems, payment systems, email marketing systems?  
  3. What could improve my customer experience? Do they want an app, ease of payment, ease of booking? 
  4. Do I need it to manage staffing levels? 
  5. Do I need it to assist with client retention and acquisition? 
  6. How much time does it need to save me? 
 

Make sure that whatever solution you go for it solves YOUR businesses problems and propels your business forward. Don’t be dazzled by the features that will not help your business, focus on your needs and if the software offers that.  

 

Potential features of gym management software: 

 

Get cash into your bank: 

 Integrated payment processing: 

By having flexible payment methods such as direct debits, credit cards, cash…cheques…. you will reduce the friction points for when a member wishes to pay, this will result in more sales.  

Integrations into payment systems GoCardless and Stripe will reduce the need for you to spend time chasing payments each month. This saved time can be spent building the business.  

 

Chase up payment: 

You may find it embarrassing to call up members to chase payments or even to send the email, so why not have this automated. The software will email or text the member and you could even include a link to the app so they can pay via their phone.  

 

Automated payment reminders will also reduce the need to chase up late payments, the software will notify members when payment is due, if they are not on direct debit. 

 

If a member is behind on payments some software will give them the option to use the app to make one-off payments.  

 

It is all about getting the money into your bank account, after cash-is-king and without it you will not have a viable business.  

 

Spend more money: 

Members may be able to store card details against their account which means that your members don’t have to bring their card when they come to your facility! 

 

Marketing 

 

Marketing emails: 

The software will aid you in managing prospects, current members and members who have left. If you have a newsletter or a special promotion you can categorise contacts into groups and target them with specific emails.  

 

Social media integration: 

The software may include a social media integration such as a facebook pixel so you can understand where leads came from and how you can re-target similar people 

 

Retention 

 

Which members may leave: 

Data collected by the software will enable you to automate your retention policy, by understanding which members are not making the most of their membership you can contact them and help them understand the benefits so they do not leave.  

 

Celebrate milestones: 

Data in the system will allow you to automate reminders for things such as birthdays, membership “birthday” etc so you can send them an automated birthday email/text/or app message or even get a reminder to send out a birthday card in the post!  

 

Renewal: 

If a member’s membership is due to come to an end, you can send them an automated email to remind them to renew and reduce the risk of them leaving.  

 

Customer 

 

Ease: 

Reduce the friction for the member at all points of the customer journey, software and apps can ensure that members can join online 24/7, book classes easily, check how busy the gym is, make online payments and ultimately make the process seamless. If you enhance the member experience, retention is likely to improve and referrals may increase.  

 

An app will also allow you to keep in contact with members on the go. We are a nation of phone and app lovers so take your customer journey to where the customer is.  

 

Digital integration 

Make digital classes look more professional with integration to apps such as Zoom. The member will log in via the app which enhances your brand and increases that seamless customer journey. 

 

Brand 

From your website to the app, your brand is at the forefront of the customer experience so you will want to ensure that whatever software you select it can showcase your brand. 

 

Legal 

 

GDPR: 

This important regulation is about the safe keeping of personal data, you need to make sure that your clients’ data is processed lawfully and consent must be freely given, specific, informed, and unambiguous.  Your gym software should allow you to store and easily access by member, digital sign-up, waiver forms, PARQ’s and T&C’s. By having this all in one place if a member was to request access to all the data you hold on them (this includes emails) you will have a single source of truth and be able to handle the request quickly and efficiently. This will ensure the member is happy and GDPR regulators are happy. 

 

The member should be able to easily unsubscribe to your marketing emails, again by having this in one location and not having to maintain two records you can ensure you are not outside the law.  

 

Stock 

One way to increase profit within your fitness business could be to sell other items such as drinks, exercise clothing, snacks etc but it is important to understand the level of stocks. This assists your accountant and ensures that stock levels are never too low or becoming obsolete. Some software providers will have an automatic re-order feature which you can set to different levels on each item type.  

 

Staff management  

Some software providers will allow you to put rotas on the system, so you can manage staffing levels, keep staff informed of any changes and then link through to payroll systems for accurate payment to staff.  

 

Information to grow business 

The software should provide a user-friendly dashboard which makes it easy for staff to use and provides valuable insights at a glance. Such insights could include, employee costs, membership retention numbers, sales numbers, attendance rates etc. These important numbers will give you key information for growing your business and where you should focus your attention, making changes before it’s too late.  

 

By linking into your accounting system, you will have a reduce admin burden and your accountant will be able to provide value information such as which services are most profitable, forecast tax and advise how much money you can take out of the business. These financial numbers can then be used to ensure the smooth running of your business 

 

COVID-19 safe 

 

Access to the facility: 

Your software should aid you with the current plans to re-open indoor fitness facilities. Of high importance is making sure members feel safe to return to your facilities and one way of doing this is having a non-touch entry system such as a QR code or barcode card.  

 

Number of people safely using the facility: 

Your software should be able to track how many people are in the facility at any point in time, this is so you can ensure people are able to social distance. Some software providers will also allow members to understand how busy the gym is right now and on certain times or days. This will allow members to plan their visits without worrying about their safety.   

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In Summary  

 

Some things to consider when comparing software: 

  1. Costs – Are there set-up fees? Support fees? Additional transaction fees? 
  2. Ease – Is the system easy to learn? Will it be easy for members to use? 
  3. Brand – Does it show case your brand? 
  4. Security – Is the system secure for members details plus payments. 
  5. Features – Does it have all the features you need? 
  6. Growth – Can it grow with your business ambitions? 
Do not be dazzled by shiny features that you do not need and simply increase the cost of the subscription, focus on your business needs and find the best solution to fit those needs. You will need to have an understanding of your business’ future plans, what you want to focus on and therefore what features will really help you move forward.  

 

Without assessing your business needs, it’s more likely that you’ll make the mistake of picking software for the wrong reasons (shiny object syndrome).  

 

If you would like more help on understanding your business needs please get in touch.  

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

2. Download our free guide on “stopping your fitness business running out of cash”  https://debbiebaileymoney.co.uk//fitness-ebook/  

3. Download our free Coronavirus support guide: https://debbiebaileymoney.co.uk//coronavirussupport/  

4. Connect with me on social media:  

https://www.linkedin.com/in/southbourneaccountancy/  

 

https://www.facebook.com/debbie.hancockSA