Remember I am sharing my own procedure, feel free to find your own, however this has worked for me and my accountant and the taxman are happy with it.
Right now it’s just you, so it might not be too hard, but imagine when you are getting more teachers to help you. It’s a good idea to start from the beginning with a good system for handling the money.
All I have for the cash is a little moneybox (big enough so that nobody can easily snatch it) with a key. The key has become important, not just because of the yoga studio, but since this is our home, a lot of people come through the doors and you don’t want to be second-guessing who took money if at some stage it goes missing.
Here are a few tips:
- Always keep the moneybox locked.
- Have a small set amount in the moneybox with enough change for your students. I keep $50 there. My till:
- 2 $10 bills
- 2 $5 bills
- 10 $1 coins
- 5 $2 coins (they’re from Australia, but you can also have fifty-cent or fifty-pence coins)
- Remove large bills and place them in a secure place if you are not making a deposit straight away. When you have more staff, I have a folder for them to put in the large bills and write down their name, amount, date and signature. Remember to empty that folder too and place cash with the rest of your money.
- Have an envelope with large bills and write down on it the amount and the day.
- Make a habit of going to the bank at least once a week and make sure the money you are taking matches the notes in your envelope.
- Resist the temptation of grabbing cash from your business for your personal use.
It’s actually pretty simple but don’t underestimate the importance of keeping it updated, otherwise it will be a lot of work to do all at once.
About the income
Here’s how you can easily keep track of your income:
- Have a log book for your students to write their names down as the walk in, I will talk about this issue below in this chapter because I consider it one of my most precious possessions. In this book I write down as follows:
- Type of class Time Teacher Payment (how much $)
Those are the headlines and under the headlines people write down their names as they walk in.
- Once everybody has left I write down next to their names, how they paid for it:
- Cash – $17: always write down the amount you received.
- Unlimited ($35 for 1 month unlimited yoga classes): I write down if they paid the $35 that day, otherwise I only write ‘unlimited’.
- 10 Class Pass: I write down if they paid for it that day, otherwise I only write ‘Class Pass’.
- Private – $75 I write this down after this private class.
- If students paid online: I get notified by PayPal whenever I receive money, so straight away I open the 10 class pass or the unlimited pass with their name and starting date, so that I and the other teachers know this payment has been made, and I write on my book the amount paid and how it was paid, in this case ‘online’.
- My teachers know all these procedures. I took the time to write these down as part of the contract we sign when they become teachers of my studio. I explain more in this chapter ‘Hiring Teachers‘.
- At least once a week I sit down in front of my computer and open my ‘Financials’ file. Remember to backup this file, because it will become your most important file to do your taxes at the end of the financial year. These are the headlines of my worksheet:
- Name of student: I write every single one of their names, just like in the log book. This is interesting because you will know how often they come, and if there’s any dispute about how many classes they attended it will be easy for you to even give them the attendance dates.
- Number: Here I track the number of students in a month, so it’s just consecutive all the way down.
- Teacher: when you start this will not be important, but when you get more teachers this will help you see how their classes are doing.
- Style of yoga: I write this down so that I can know if there’s a style of yoga that is not doing well, this way I can make informed decisions.
- Payment: I write down the amount they paid on a particular date, if they did not pay I write down if they used Unlimited or 10 class pass.
- At the end of the month I add all my income, and voila! It’s ready for your accountant at the end of the financial year.
About the expenses
I have a spreadsheet for this one too; I keep it in the same file ‘financials’ in another tab called ‘expenses’.
Here I write down my monthly expenses as follows:
Studio (depending on your country, it might be tax deductible):
- Rent: 30% of my monthly rent
- Electricity and Gas: 30 % of my home bill
- Internet: 30 % of my home bill
- Telephone: we don’t have a landline anymore, so I apply 30% of my mobile phone bill
Equipment: (all 100% tax deductible)
- Bolsters, cushions, mats, aromatherapy…
- Lighting, light bulbs, connections, and electrical extensions…
- Music: downloads, speakers, batteries, and the CD/MP3 player itself
- Aromatherapy: essential oils, diffuser, oil burner…
- Candles: electrical and regular candles
- Decorations and pictures (if you made them, then add the materials)
- Office supplies: books, pens, photocopying, photos, and punches…
- Shoe rack (if you made it, then add the materials)
- Coat hangers
- Other furniture: desks, tables, closets (don’t forget also the maintenance)
- Computer and printer: also the supplies and maintenance
Renovations and cleaning of the yoga room:
- Carpet: new one or just the upkeep of the one you have
- Floors: new one or just the upkeep of the one you have
- Walls: painting, adding, removing
- Ceiling: painting, decorating…
- Windows: changing, up keeping, maintaining
- Cleaning: cleaning products and cleaning services
- Garden: If your studio has views to your patio or garden, you’ll be able to deduct 30% of the maintenance and upkeep
- Entrance: cleaning and maintenance of the hall and/or corridors
- Bathroom: toilet equipment and cleaning services
- Printing: flyers, timetables, signs
- A-frame or any other signage, (purchase, cleaning and maintenance)
- Advertising: online, graphic and media (radio, tv)
- Promotions: online, graphic and media (radio, tv)
- Postal: in case you do direct advertising through mail drops, or you send something to your students.
Clothes and accessories:
All your yoga clothes and personal yoga accessories are 100% tax deductible.
- Payment: I do not include my own wages, but feel free to do so. I actually do not pay wages, our teachers are casual. I explain more about this in this chapter ‘Hiring Teachers’.
- Professional development: every now and then I organise courses and workshops for my teachers at the studio, so when I pay for them to attend any yoga-related course, it’s 100% tax deductible.
- Anything else you provide to your teachers: mobiles, music, and clothes, special equipment… I do not give them any extras but there’s a choice…
- Insurance and liability
As for my assets’ depreciation, I leave it all for my accountant, I just make a list of the assets of the studio, how much I paid for them and the date I bought them.
I do this every time I incur in an expense, and at the end of the month I just add them all up and prepare a report for my accountant at the end of the financial year.