Bookkeeping Strategies for Personal Trainers and Coaches
Having your own training and coaching business is surely rewarding, especially if you see your clients and your business’ progress. You earn your profit, and at the same time, you help people to stay fit. Time is vital for you to focus on your business operations. And so, keeping things organized is a must to be on top of your game. But doing this can sometimes overwhelm you. You manage everything from getting more clients to bookkeeping and filing taxes.
You may easily get things done when dealing with your business operations, but how about your accounting and finance? Here are the simple bookkeeping strategies that will help you with your training and coaching business:
Gather Essential Information From your Clients.
Having records of your clients is beneficial, not only on your marketing but also on your bookkeeping. When you have a catalog of clients’ details, invoicing will be much easier for you.
Collect the name, address, contact details (phone number and email address), and other information that you think you may need. Organize and classify them using Excel spreadsheets or any online tools. Make sure that these records are safe and secure.
Record All Your Financial Transactions.
The best way to keep your financial reports accurate at the end of a period is to record all your financial transactions. Regardless of the amount, you should always make inputs on your record – both revenue and expenses.
For trainers and coaches who are just starting their business, using Excel spreadsheets is advisable. You will be hands-on, and you can see every detail of your financial activity. It will help you understand the flow of your business at a deeper level.
When you use Excel, create separate tab sheets for your revenues and expenses. Input your transactions, indicating their date, transaction details, and amounts. You can use the example template for recording expenses below:
Note: It’s effective if you maintain monthly records per tab sheet.
Keep all your printed sales invoices and bill payment receipts in separate folders and organize them by date. So, when you need the reference of a certain transaction in your spreadsheet, you know where to find it.
Identify Your Profit & Loss
The reason why you need accurate records of your revenues and expenses is to have a correct Profit & Loss. Knowing this will help you distinguish if your method in managing your business is effective or not. Of course, all businesses want to profit. So, if your records are correct and complete, expect an absolute result of your Profit & Loss.
Here are the simple steps to identify your Profit & Loss:
Categorize your expenses.
Create your business expense category, such as Rent, Supplies, Membership Fees, Taxes, so on. Then classify each of your transactions with these categories. In this way, it will be easier for you to identify what kind of expense is your spending on that date.
Sum up each category.
After that, sum up all the amounts each category. Input the total of Rent, the total of Supplies, and so on in another tab sheet or in your Profit & Loss tab sheet. From the previous example, you can use the template below:
Input your total revenue and the total categorized expenses, then deduct the total expenses from the total revenue.
It’s better if it will look like this:
Monitor Your Cash Flow
In any business, cash is the most crucial element to keep track of because it is prone to many errors. You can avoid this by monitoring your cash flow activity. The cash flow activity is the movement of your money coming in and out of your pocket or bank account.
Don’t get confused as this is different from Profit & Loss. The Profit & Loss determines your earnings or losses within the period. But your cash flow determines your cash available at the moment. Knowing your cash balance is equally important as knowing your profit. When you know the available cash you have, it will be easier for you to create a budget for your future business expenses.
Refer to your bank statements for your cash flow activity if all of your transactions are going through your bank. It is advisable to have a separate bank account for your business. Having a business bank account will help you efficiently identify and monitor your business transactions.
Maximize Tax Deductions by Identifying Your Expenses
Another important thing to understand is your business expenses. You can’t just include any expenses in your record to consider it as business expenses. Remember to separate your personal from your business expenditures. So, what are these business expenses?
In simple terms, business expenses are your expenditures essential to operate your business. Since your business is health and wellness training and coaching, your business expenses may come from purchasing exercise equipment. Your certifications or educations costs (training or membership) can qualify as tax-deductible expenses too. You may also include your rent expense, and travel and accommodation, or anything relevant to your business.
Schedule Reminders for Your Tax Payments to Avoid Late Filing
Understand the IRS rules about the tax bracket applicable to you. Always prepare your tax filings before the due date to avoid any penalties. You can use scheduling or reminder tools, so you won’t miss it. If you are unsure what to do, you can ask an accountant or a bookkeeper to help you out.
Doing bookkeeping on your own for your business might be overwhelming and confusing. But following these simple guidelines will save you and your business from future accounting-related troubles. Additionally, when you know and understand the financial flow of your business, you’ll easily identify the things that need improvement.
And when your business start to grow, your finances will expand as well. If this happens, better to get a reliable accountant or bookkeeper who will look after your business’ financial activities. You can’t put all the work on your hands when the job is overflowing. When you designate the tasks to appropriate persons, you can focus on keeping your clients fit and healthy.
Figuring out taxes yourself, especially if it’s your first year of business, can be quite daunting. You can always hire tax experts to help you file your tax returns. Trust me; it will be worth the reduction in your tax bill!
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