CrossFit Risk Rentention Group

Accounting is a critical aspect of business many fitness professionals fail to realize the importance of until they run into issues that are above their knowledge or skill level to solve. It’s not necessary to wait until a seemingly insurmountable financial difficulty occurs to work with a credible accountant to get things on track. It’s best to consult or partner with an accountant from the start.

Because it’s not easy for professionals to navigate the potential land mines that tarnish their business’ growth, reputation, and profitability, it’s highly advantageous to work with an accountant or CPA who has more than a passing knowledge of fitness, CrossFit, and financial management practices. Whether you plan to establish a partnership or strike out on your own in the CrossFit industry, it’s necessary to have the right resources in place to help you get a handle on the basics so you can implement the right accounting practices to ensure your business’ growth, longevity, health, and profitability.

Consider the following CrossFit gym tips on the value of having a top-notch CrossFit gym accountant and why you should hire one before you start making any financial decisions for your CrossFit business.

Make Sense of Financial Data

As a fitness business owner, you’re responsible for making decisions that impact every aspect of your operations. The choices you make as a CrossFit Affiliate owner not only impact your members and staff, but they also affect your gym’s operational expenses and profits too. No amount of professional experience can fully prepare you for the financial challenges and pitfalls you’ll encounter daily while managing a gym, attracting new members, providing training services, and motivating staff and clients towards their health and fitness goals.

It’s hard to track business expenses, cash flow, and generate revenue while focusing on operating a CrossFit box. It’s important to have an accurate financial snapshot of your business for insights into how you can optimize your business plan and manage your operational costs efficiently.

The Value of Having a Top-Notch CrossFit Gym Accountant

Business owners must take note of several categories of bookkeeping and accounting practices. In addition to having a clear understanding of the basic principles of gym financial management, it’s necessary to implement strategies and systems that balance accounts and properly track bills, invoices, inventory, income, sales, membership sales and cancellations, and accounts receivable and payable.

CrossFit Gym Accountants Mitigate Tax Liabilities

It’s important to track and report cash flow when the IRS comes calling. When faced with the many responsibilities of operating a fitness business, it’s not easy for professionals to separate necessary expenses from the nonessential ones.  While having an accountant is ideal for keeping track of receipts, invoices, and all business-related financial documents, online banking and software programs are convenient options to use for organizational and budgeting practices as well.

Streamline Payroll Management

Payroll management is nothing to overlook. It’s not enough to determine wages, contractor fees, and payment schedules, you’ll need to understand how taxes, benefits, business expenses, and insurance work and keep accurate records to help offset potential hurdles and liabilities that may occur, especially during tax time.

An experienced CrossFit gym accountant knows how to analyze payroll expenses and ensure independent contractors and staff receive a fair wage without putting the business in a bind. Not only does this help drive employee satisfaction, improve gym culture, and business health, they can also create wage projections to help with staff development, retention, and recruitment to help your CrossFit gym thrive for the future.

CrossFit gym accountant

Track and Update Inventory

Successful gyms diversify their revenue streams. They don’t simply rely on gym memberships to generate profit, they also sell merchandise, workout gear, and health and fitness supplements, products, and services to increase their profit margins. These items add up so it’s important to document your product inventories. Besides tracking the date and quantity of items sold and necessary to restock, don’t forget to track the trends of what sells the most and how often.

Keep Personal and Business Finances Separate

Many new gym owners rely on their personal funds to finance their businesses during the early stages. While this doesn’t always cause difficulties initially, it’s the perfect equation for tax troubles with the IRS. To avoid tax penalties and a hefty bill, a CPA can help fitness professionals set up business checking and savings accounts, and help secure funding, lines of credit, and credit cards to shore up any funding needs to prevent the comingling of personal and business finances.

All business expenditures should go through the business accounts so they’re easier to track and manage financials and budget for business-related expenses. That way you have receipts to show when necessary. Avoid using business finances and accounts as a personal paycheck. Accountants also provide regular reports and can implement systems and software to track and check business expenses and income to keep everything running smoothly for the gym.

Establish and Update Budget and Financial Goals

Gym and fitness professionals should get in the habit of checking their finances and reviewing their budget quarterly. But there’s nothing wrong with doing so more frequently, in fact it’s encouraged. Performing routine audits and updating the budget as necessary are essential to preventing financial difficulties before they arise.

The first thing to do when creating a reasonable budget is to consider all expenses, including payroll, facility and equipment maintenance and repairs, events, CrossFit insurance, marketing and advertising, merchandise and equipment acquisition, emergency funds, etc. Documenting these expenses in advance and overestimating income and expenses can help provide an extra cushion so you don’t have to dig into the overall budget.

Now that digital banking is available, it’s easy to complete financial transactions and accounting online. There are various banking and accounting online and software-based systems for business owners to utilize when they want to transfer between accounts, see statements, and organize their transactions.

Because business finances aren’t everyone’s forte, there’s nothing wrong with hiring a professional to manage the books. Accountants and CPAs offer their services on an hourly and contract basis. It’s important to compare rates and services with your business’ needs and resources when selecting an appropriate one with whom to partner. If you decide to go this route, it’s still a good idea to consider using an web-based app or software to track all business expenses and income as backup.

Not only does this help prevent potential issues that may arise during the course of managing your business, utilizing a third-party professional, app, or service to tackle the accounting leaves you more time to focus on managing your gym, and increasing memberships and profits. It also provides members and staff with the fitness and health-related services, training, equipment, and resources they desire to meet their goals.

Key Takeaways

It’s not necessary to be a financial business guru or to have a deep understanding of accounting practices to run a successful CrossFit box or offer training or fitness services. CrossFit professionals can’t go wrong with working with a professional gym accountant or CPA. Besides analyzing, tracking, and organizing business related funds, they can help set up business accounts, budget, financial projections and more to help with funding.

Their insight can help point out issues that compromise cash flow, profitability, and even the daily operations of the business itself. Accountants are also extremely useful in preventing and navigating tax-related concerns before, during, and outside of tax season, especially if the IRS decides to request more documentation or perform an audit. Accountants save business owners time and money by doing all the heavy lifting on various aspects of a gym’s finances, including payroll, benefits, inventory, budgeting, and help with keeping personal and business expenses and finances separate.

They also offer expert guidance and even accounting, payroll, and other types of software to help CrossFit gym owners confidently make the right decisions to manage their gym finances to make their business successful and profitable while meeting the needs of its members. Don’t wait until you’re facing an IRS audit or dealing with litigation to seek out the services of a top-notch CrossFit Gym accountant. By then, it could be too late, and you could end up paying more than if you had their services from the start.

Whether you plan to use their services for daily operational finances or to tackle more of the big stuff, keep in mind that tax laws are updated frequently and the penalties for not keeping up with them can get quite expensive and are not always easy for fitness business owners to understand or navigate. Accountants are invaluable to any CrossFit box gym or affiliate.

For more CrossFit business or affiliate resources, check out the CrossFit RRG blog. To learn about CrossFit RRG insurance products or for a policy review, feel free to call (310) 694-0243 to speak with one of our friendly agents today!