How to Record Revenue for Yoga, Pilates, and Barre Studios

Dear Dangerously in Love with Finance,

I own a Yoga, Pilates, and Barre studio in Seattle, Washington. I use a bookkeeper but often still find it hard to understand how revenue is recorded for our various classes and memberships; it seems to vary due to people sometimes paying in cash or online platforms, sometimes pre-paying based on certain offerings. We also sell clothing and accessories. How should all these different payments and services be recorded to stay accurate, organized and compliant with taxes? I want to ensure proper revenue recognition per GAAP (generally accepted accounting principles).

Best,
Recording Yoga, Pilates, and Barre Studio Revenue

Dear Recording Yoga, Pilates, and Barre Studio Revenue,

First and foremost, congratulations on plunging into the invigorating world of wellness! I do love a good Yoga, Pilates, or Barre class; they each add something special to my workout.

Owning a studio in the vibrant heart of Seattle sounds exciting, but I can imagine bookkeeping might be the equivalent of a mountain pose you’re not quite ready to hold.

Consider bookkeeping as being to record your many ways of arrival of funds what choreographing a smooth flow through your classes is to each different posture and way in which a payment and service needs to be positioned perfectly to keep balance in your books. This is how you can do it:

Categorize Payments: Look at cash, then online payments and pre-paid offerings as different entities. All cash payments should be recorded as the payments arrive and matched to your daily sales report.

For all online payments, make sure to reconcile your payment processor reports with your bookkeeping software in order to catch any discrepancies.
Any pre-paid services, like class packs or memberships, should be recorded as a liability first. Revenue is recognized only when the service is performed.

Separate Revenue Streams: It is common for many Yoga, Pilates, and Barre studios to make the mistake of grouping all their deposits together under one income category, without providing specific labels for each source of income. Your classes, memberships, and retail sales are different muscles that need individual attention. Use separate accounts in your bookkeeping software for each type. This will help you see which parts of your studio are the most flexible and which might need more stretching.

Include Sales Tax: Not every dollar you collect goes straight to your bottom line. Some of that goes to Uncle Sam in the way of sales tax. Make sure you’re collecting and accounting for this separately so that you don’t get a surprise bill at tax time. It is important to record sales taxes collected as a liability.

Inventory Control for Sales: Maintain good records of what clothing and accessories are in stock for sale. This keeps the numbers in line with your sales, shows any shrinkage or theft that might be happening, and makes sure you have everything entered and recorded correctly.

Reconcile Regularly: Much like you wouldn’t skip your savasana, don’t ever skip the monthly reconciliations. Compare your bank deposits back to your POS reports. Be sure that everything is lining up. Doing that will catch any errors or missed payments early on and leave you with the strength to make good decisions, armed with an understanding of the flow of your money.

Recording revenue correctly is part of a good bookkeeping structure, as it is not just a game of compliance but about the assurance that you know the financial position of your Yoga, Pilates, and Barre studio and that you are standing on firm financial ground.

Keep on practicing flexing those financial muscles, and soon it will feel as normal as your favorite yoga pose.

If you need any accounting, bookkeeping and financial management support for your Yoga, Pilates, and Barre studio, please do not hesitate to reach out to us.

As this is what we do…

Regards,

Dangerously in Love with Finance

Lozelle Mathai, MBA, Certified Forensic Examiner
Your health and wellness accountant

An illustration of a branch with leaves for bookkeeping concept

Sound Familiar?
Don’t let financial complexities hinder your practice’s success. Contact us today to discuss your specific needs and explore how we can support your financial goals such as how to record revenue and the revenue recognition process.

Contact Healthy Bodies of Finance today and take the first step towards a brighter financial future.

Submit your own “Dear Dangerous in Love in Your Finance”

Feeling Financially Lost? We Have Answers!

Here’s how it works:

1. Ask your burning financial question below. Our team of experts are here to listen and offer personalized advice.

2. You will be automatically subscribed to our newsletter. Get insightful tips and strategies delivered straight to your inbox, so you can stay ahead of the curve.

We’ll answer your question in an upcoming newsletter! Look out for it and see how our experts can help you achieve financial clarity for your practice.

Don’t let financial stress hold you back. Ask your question today!

This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax and accounting situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. Healthy Bodies of Finance is an accounting firm that specializes in working with health and wellness providers. We provide monthly accounting & bookkeeping services and financial education. For more information on our specialized services for health and wellness providers please contact us at [email protected]