The A to Z Guide to Fitness Bookkeeping

Key Takeaways

Most gym owners we talk to feel like they’re working hard but not seeing enough money left over
Once we start tracking expenses properly, the missing money usually shows up in the numbers
Bookkeeping is just keeping a detailed record of what’s coming in and going out
Without it, it’s almost impossible to know what’s helping or hurting your bottom line
You can’t grow a fitness business if you don’t know what your biggest costs are
We recommend using Xero because it’s easy, mobile-friendly, and built for non-accountants

Your fitness business may be doing okay, but do you still sit there and wonder, “Where’s all my money going at the end of the day?”

You’re working hard, so shouldn’t there be more money left over?

This is a question we hear often from fitness business owners, but with the right systems in place, it doesn’t have to be a recurring concern.

When you’re struggling to understand where your money is going, it’s essential to start with tracking your expenses. To do this, we suggest beginning with an online bookkeeping platform.

In this blog, let’s break down what bookkeeping is, why it’s important for your fitness business, and how we handle bookkeeping services here at The Fitness CPA.

What is Fitness Bookkeeping?

Essentially, bookkeeping is the process of keeping track of every financial transaction related to your gym or fitness studio.

For example, you’ll need to record membership fees that your clients pay monthly or annually, as well as the fees from individual classes or personal training sessions. These are your revenues. Every time you buy new equipment like weights or mats, or pay your trainers and staff, these also need to be documented. These are your expenses.

Think of bookkeeping as a detailed diary of the ins and outs of your business’s finances.

It helps you understand exactly where your money is coming from and where it’s going, allowing you to make more informed financial and operational decisions.

Why is It Important?

Have you heard the saying, “You can’t grow what you don’t measure?”

That’s the gist of why bookkeeping is so important for a fitness business. Proper bookkeeping helps you manage your spending by providing a clear view of where your money is going.

For instance, if you see that a large portion of your income is going toward your contracted cleaning service, you might decide to adjust your budget by negotiating the contract, having them do less and your team do more, or foregoing the cleaning service all together and having your team keep things clean and tidy for members.

Bookkeeping, done properly, also helps you track your income from memberships and classes, making it easier to see if you’re earning enough to cover your expenses. With accurate financial records, you can make better decisions for your business.

For example, if you notice that labor costs for personal training have been growing while revenues have been stagnant, you may either:

Sell more training sessions in a month
Increase training rates charged to clients
Delay plans for pay raises or do selected raises for high performers only

In essence, by measuring and understanding your financial data, you set yourself up to make informed decisions that drive growth and improve your bottom line.

What’s The Best Bookkeeping Software For Gyms & Fitness Businesses?

The good news is, when we say to keep track of everything in a diary, we don’t mean by pen and paper.

There are awesome bookkeeping tools out there these days, like QuickBooks Online, Wave, and Xero.

Here at The Fitness CPA, we prefer and recommend Xero, mostly because there’s virtually no learning curve一anyone can use it from pretty much the first use.

It’s a user-friendly bookkeeping tool that makes managing your finances easy. You don’t need to be an accounting expert to use it.

Additionally, Xero connects with your bank accounts and other financial apps so that many of your transactions are automatically recorded. When you use technology to your advantage, such as finding a modern bank with bank feed capability, and implementing apps like Bill.com for secure bill payments, you don’t have to worry about manually tracking your spending. Your financial management is simplified and time is freed up for you and your team.

Last but not least, it’s mobile and was created as a cloud-based system that can be accessed from anywhere. Meaning, you can access your financial records from any device at any time, making it easy to stay on top of things, no matter where you are.

Trust us, if you’re currently using QuickBooks, switching to Xero is a breeze.

Many of our clients tell us, “Is that it? It seems too easy!”

It’s designed to be straightforward and hassle-free, so you can focus more on running your fitness business and less on managing your finances.

How Often Should You Do Bookkeeping?

To keep your finances in good shape, you should update your records regularly.

By regularly, we meant that you probably should review and record transactions at least monthly.

This frequent updating helps you catch any issues early and keeps your records accurate.

It also prevents the stress of scrambling for information at the end of the year, making tax time much smoother.

How The Fitness CPA Helps

The good news is that there are businesses (like ours) that handle all of this for you.

In fact, we’ve calculated that we save businesses an average of 15 hours a month in tedious, yet necessary, bookkeeping and reporting.

We take care of the transaction recording, reconciling transactions with your bank account, coding them to the right category (specifically set up for fitness businesses), and give you beautiful and easy to understand charts and reports every month so you can see how your fitness business is doing at a glance.

We wrote a bit more about our bookkeeping services over on this page here.

And we’ve made it really easy to get started!

Author
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Eric Killian

CPA & Founder | Accountant, husband, father, mountaineer.
Fitness is such a big part of who I am. Maintaining a healthy lifestyle, eating well (mostly paleo), hiking, backpacking, mountaineering, practicing yoga and Crossfit are all important cornerstones of life. But I love ice cream and cookies too much to say no!
I love helping owners make sense of their business and finding ways to grow it. It’s an honor to help you see situations, scenarios and opportunities from all sides so you can make informed decisions.

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