Avoid these Top 3 Accounting Mistakes
Guest blogger, Martyn Southwick, comments that too many excellent fit pros fail due to lack of business knowledge.
After 10 years of working alongside Fitness Professionals I have become well versed in the pitfalls you regularly fall into when it comes to dealing with your accounts and tax returns. All of these are completely understandable, however, hopefully by spending 5 minutes reading this you will save yourself a lot of headaches down the line as well as some of your hard earned money!
Doing it all yourself
When you first start your career as a Self Employed Fit Pro, it is entirely normal that money will be tight, so you will naturally look to try and keep your costs down any way that you can. The reality is, however, that by acquiring the services of a good accountant, you will be making one of the most important and necessary investments into your business.
There are 3 main reasons for this:
- TIME - It frees you up, giving you more time to increase your income rather than wading through paperwork for hours on end. As a self-employed person your time has a value so don’t waste it by doing tasks that more qualified people could be doing for you.
- MONEY – It is likely that they will actually save you more in tax than what their actual fees are (they should be charging you approximately the cost of one PT session per month). So by paying them to do it, you are financially better off.
- PEACE OF MIND – Knowing you have one less thing to worry about is priceless!
Not keeping a record of all income
We are all guilty of skipping things at times due to distractions, volume of work etc, however, it is really important that you keep a record of all the business income you received. HMRC are aware of how much you should be earning given your profession, therefore any obvious discrepancies will just invite them to take a closer look into your business. Trust me, nobody wants that!
They are also actively targeting “cash in hand” businesses so you really should ensure that you are being as transparent as possible. Don’t worry, this doesn’t mean that you will be hit with a massive tax bill at the end of the year as your accountant should guide you on allowable expenses to ensure your tax liability is reduced to as low as is legally possible.
The easiest way to do this is to keep a daily/weekly spread sheet of all work carried out. Ask your accountant for a template for you to use.
Not keeping or asking for receipts
Always get a receipt, no matter how trivial or irrelevant you may think it is.
Leave it to your accountant to decide whether it’s relevant or not, after all, that’s what you are paying them for!
I would recommend keeping all your receipts together and the put them in a monthly folder to be passed to your accountant at year end.
Although it may all seem frightening and difficult, as long as you stay disciplined and organised (or pay an accountant to do it!) your business will flourish.
Martyn Southwick ATT
The Accountant For Fitness Professionals