Running a successful fitness studio isn’t just about getting your clients to break a sweat; it’s also about breaking down the numbers. At Numberwise, we firmly believe that a solid understanding of your financials is the key to unlocking the full potential of your business.
Today, we’re diving into the exciting world of revenue recording – a topic many fitness business owners unknowingly neglect. Let’s uncover the hidden gems in your revenue data and discover why proper recording is the ultimate game-changer.
How Most Fitness Studios Record Revenue
The “easy” way often seems the most appealing in life, and in the world of revenue recording, it’s no different. Many fitness studios fall into the trap of lumping all their deposits into one income category, labeling everything simply as “revenue” or “sales.” It’s quick and simple. But, this strategy often overlooks crucial pieces of the financial puzzle.
3 Crucial Insights Your Fitness Studio is Missing
#1 – Did you get paid everything you were owed?
Most fitness businesses rely on credit card or ACH payments, and management assumes the deposits they receive from their credit card processor are correct. The truth is, if you aren’t regularly reconciling your bank deposits to your point-of-sale (POS) system report at least monthly, you can miss out on payments you are owed.
There are a variety of reasons that your payments received don’t match the money you are due. There may be times when credit cards are declined, and new payment information needs to be gathered from your customers. Or the credit card processor might be holding back some deposits for risk management purposes.
Additionally, most credit card processors deduct their fees before making the deposit into the business bank account. So, if you simply record deposits into revenue, you get a misleading picture of your total revenue and expenses.
#2 – Is anything else hidden in this deposit?
When a business collects a payment from a customer, it doesn’t always mean that 100% of the money it collects is revenue. The payment might include sales tax, which must be reported and paid out later. The payment might also include prepayments (or gift card purchases) to be redeemed for later services. If these future liabilities aren’t being recorded properly when the money is collected, the business owner might be in for a surprise when the money comes due.
#3 – What type of revenue is this?
Not all revenue is created equal. Monthly memberships, class packs, daily drop-ins, retail sales, and specialized workshops all contribute differently to the financial picture of your fitness business. Understanding and tracking each revenue stream separately can shed light on which areas are thriving and which need more attention.
If you’re responsible for making decisions about the future of a fitness business, you’ll want all of this information to help you make logical and informed decisions.
Bottom Line
There’s more to recording revenue for your fitness business than simply copying the total amount you’ve received in payments. Reconciling deposits, tracking revenue streams separately, and analyzing receipts for taxes and prepayments will give you a better understanding of your fitness studio’s income.
Do you have a question about recording revenue from your POS system or other questions about recording revenue for your fitness business? Drop us a comment below, and we’ll see if we can include the answer in an upcoming blog or video. If you’re ready to take your bookkeeping to the next level for your fitness business, fill out our get started form to get in touch.
More for fitness studios / gym owners:
Blueprint for new gym success
Marketing for gyms – 4 tips to attract new gym members
Reduce costs for your fitness business
Increase income for your fitness business
3 numbers to make more money for your fitness business
