Tag: xero accountant

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Business tips Finance Function Gym

Thinking of changing accountant but worried that it is too hard?

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Thinking of changing accountant but worried that it is too hard or you are too busy

I have seen this regularly, you are comfortable with your current accountant, they are not doing anything wrong as such, the accounts are submitted on time and you are compliant. But it has been playing on your mind that changing accountants might be worth it.

You have seen on social media that accountants can offer so much more than just keeping your gym business compliant. They can have a positive impact on your bottom line, provide advice, give you confidence in your business and save you time.

You put off changing as you think it will be a hassle, it will mean working with someone else and learning how they do things. It seems daunting and complicated when sticking with the status quo is effortless.

But you went into business to make a profit whilst helping people keep fit and healthy. So why stay with an accountant that is not helping your business more forward and achieve your personal goals?

These are some of the reasons I have seen for not moving accountants and maybe you recognise some of them?

  1. People think it is hard to change accountants, they don’t want the hassle, it feels like a huge task! It is just easier to stay put. 

  2. Their accountant is a nice person and they don’t want to upset them. Maybe they have even become friends (or friends on social media).

  3. They have been with their accountant for ages and know how they work.

  4. They are hesitant about change, it’s in our nature to keep things consistent

  5. They are concerned that the new accountant might not understand their business or be as good as their current one.

  6. Their accountant knows their business inside out and so they don’t want to spend time explaining it to someone new. 

  7. It is not a priority right now, they will look at it later but then something else comes along that is easier to deal with and the change never happens. 

  8. They just don’t know what to expect with a new accountant, what happens, how does it happen and how much does it cost?

Therefore they decide its best to stay put and not upset the apple cart. But we all know that life is about change and amazing things can happen just outside our comfort zone. 

A new accountant could help you to understand your vision, ask you the right questions and ultimately help you reach your goals. 

If you are not 100% happy with your accountant but still don’t move, this is what it could be costing you:

  1. Your time! If you don’t fully trust your accountant, you may spend time worrying, double checking and asking questions. An accountant should put your mind at rest and take that worry away from you.   

  2. Money – if your accountant doesn’t help you to find the underlying reasons why your business is not profitable enough then they are costing you money. We all know that simply getting “more sales” is not the answer to this complicated problem. 

You don’t want this and that is why you are looking around. Below I have outlined the process I follow and it’s actually really easy. I will do most of the leg work for you, so it’s easier than you think.

Once you have decided to move your financials to me, the process is: 

1.   E-sign the proposal and letter of engagement (the terms and conditions)

2.   Gather your personal and business information and set-up the direct debit

3.   You use our template to tell your current accountant that you are moving

4.   Then leave it with me to contact your previous accountant

5.   I will then handle the access rights with HMRC

6.   Then we can begin speaking specific numbers and how we can improve them. 

This will pretty much happen behind the scenes with me working with the old accountant to move your business finances across. Sometimes there can be delays but I will handle these as much as possible.

Right now, all you need to do is book in a discovery meeting via this link and have a free no-obligations meeting to help us both decide if we are a good fit and moving is the right decision.

If you would like to learn more about the process I follow for the discovery call and beyond then read this blog:  https://debbiebaileymoney.co.uk//how-to-get-started-with-southbourne-accountancy/

 

Curious about prices:https://debbiebaileymoney.co.uk//how-much-does-accounting-cost-for-gym-owners/

Why a local accountant may not be the solution to your problems: https://debbiebaileymoney.co.uk//choosing-an-accountant/

You use Xero, so do you really need an accountant: https://debbiebaileymoney.co.uk//do-you-really-need-an-accountant-for-your-gym-if-you-use-xero/

 

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 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/