I recently spoke to a brand new gym owner who was asking what I would code certain expenses in her chart of accounts. When I said I wasn’t totally sure what the categories were anymore as it was a million years ago I did my own accounting, I recommended she get a list from her CPA. She then went on to tell me she didn’t have a CPA. 

As a new gym owner, I understood it was an expense that seemed excessive for minimal revenue. By the time you guys reach this group though, you understand why you need a CPA. You also should know why you need a CPA, which is different than a bookkeeper. But if you have a CPA, then why are Next Gen coaches saying it’s now time to do a review with a CPA? 

Here are a few reasons why you absolutely should do a review with a CPA at this stage in your business (and I mean a full, sit-down review). 

  1. You should understand what a P&L and Balance Sheet looks like and how to interpret it. While I personally believe they’re not the end-all/be-all for your financial well-being of a business, they’re certainly the first thing banks will look at if you ever try to finance a project or buy a building. You need to know how to understand them.
  2. You need to review your business structure. Is an LLC the best structure for you still? Maybe it’s time you ask about an S-Corp to minimize tax liabilities and put yourself in a better personal financial position each year. (Sorry Canadians, there are equivalences here, but you’ll need to decipher those terms or turn to Riana for the translation.) 
  3. Are you paying for things on your personal accounts that could qualify as eligible tax deductions? I was!
  4. Are your kids helping out around the gym here and there? I found out my youngest could go on payroll at 9 years old and get paid for helping clean at the gym (and not only is paying her a deduction for me on the business end, but she won’t make enough this year to be claimed, so it’s essentially a tax-free situation!) 
  5. Are you offering things like health care stipends or tuition reimbursement to your staff that could be coded differently in your payroll and be completely tax-free for both you and the employee? 

Some of these may not apply to you, but there are a dozen other topics that probably do. It’s important to meet with your CPA at this stage in your business to remind them you’re always looking for legal tax breaks. Most of the deductions I’ve found over time are ones I got curious about and asked, or ones my accountant knew me well enough to ask me about. If you’re struggling to find a CPA who will be invested in you and your gym, PM me and I can help connect you with a great one who understands cheer gyms!