Imagine what you could do if you actually had P&L’s that showed you if you were making money with your premier, regional, local teams along with your camps, clinics and private coaching lessons. These things are absolutely possible when you have proper accounting processes in place within your club. In Part 1 of 4, Bookkeeping Is An Essential Element! we discussed the importance of proper bookkeeping, but now we’ll discuss all the things that are possible when your bookkeeping is where it needs to be.
Proper P&L’s (Profit and Loss Statements)
First, let’s discuss what a P&L is and why you need one. P&L is an acronym used to discuss profit and loss statements that are one of the fundamental elements of running a business (the others are balance sheets and cash flow statements). P&L’s show a club director or business owner a detailed view of their income, expenses and net income (or net loss). A good P&L is very detailed within the income category and should breakout the major categories of income driving a business or club, which would include income from registration, camps, clinics and sales of gear in some cases. With respect to the expenses category of a P&L, this should also contain a significant level of detail and should always include line items for payroll and salaries, rent or mortgage payments, travel related expenses and marketing related expenses for sure.
Budgeting Within Each Category
Ideally, once all of your bookkeeping is in place, a well run club would have individual P&L’s for each major “line of business” within their club. For example, an business may have different lines of business within the overall umbrella of the business. For a volleyball club, these lines of business are essentially each major category that the club operates, which could be premier, regional and local. These designations likely note the level of competition (and the associated travel and tournaments that are required) an athlete and parent should expect when they tryout for these particular teams. As every experienced club director knows, each category is very distinct with respect to what is required and one certainly requires a higher level of travel and tournament play than the other. Within a well run club, a director should have excellent visibility into where there income sources are and the corresponding expenses to be able to determine if each category is operating profitably.
Even More Upside
But wait, there’s more! When a club has taken the time to properly setup their bookkeeping and accounting functions there’s even more that can be done. When P&L’s have been properly setup and accurately tell a certain story it makes is much easier to interact with banks, any investors and can be used to show parents a high-level view of where there money is being spent. It is true that parents want some level of visibility into where there money is going when they pay significant sums of money for registration. It’s certainly up for debate as to how much information should be shared, but a high level view could certainly be offered to give a parent comfort that their money is ultimately being spent on their athlete giving them the best opportunity to obtain a scholarship.
Occasionally, I’ll get a question about which system to use and my honest answer is, it doesn’t matter so long as you use one. As with any technology platform, each system has its own pros and cons. Whether you use, Quickbooks Online, Freshbooks, Zoho or Xero, my only recommendation is to use one that is built on a cloud based platform. This will expand your possibilities infinitely and allow you to access a whole host of options that will benefit your business (including the ability to have PaidUp manage your bookkeeping, accounting, payroll and club dues management). Check out “Wouldn’t It Be Amazing If You Had Bookkeeping, Accounting, Payroll and Club Dues Management Support” for more information.
Schedule a demo with PaidUp today to discuss your personal situation and how we deliver these solutions to your club. Setup and integration is quick and we can be up and running for the upcoming 2018-2019 season. Call 512.518.4943 or email email@example.com today!
About the Author
Allan is the father of three boys who are big time travel lacrosse players. As a father and CEO of PaidUp, he totally gets what club directors and parents face every day as we try to provide the best for our children. Allan is also a recovering banker so he grew up (professionally speaking) helping small businesses thrive! Don’t hesitate to pick his brain how to run a great club! Allan can be reached directly at firstname.lastname@example.org you can schedule a time to connect by clicking here: https://paidup.as.me/.