Measuring sales and success at your studio is non-negotiable. And knowing what drives (or deducts) from your revenue is a metric you can’t run your fitness business without. At Walla, we give you two different ways to track growth: dollars in and dollars out and accrual-based revenue. So what is accrual-based revenue? It starts with amortization (say that ten times fast) and understanding the difference when you toggle between our newly combined Cash/Sales Report.
Amortization: The accountant-friendly payment process
Whether amortization is a new or familiar financial term, it allows you to account for the cost of an asset over time—and expense the cost over the course of use. But how is it applicable to studio revenue? Think of it this way: Your clients buy a membership or plan that covers a longer period of time, like an Unlimited Annual Membership. This doesn’t just include one class instance and isn’t instant revenue because it can be used across twelve months. Over the year, you need to pay instructors and studio expenses. By amortizing the cost of that year-long membership, you can accurately assign and attribute revenue monthly in alignment with an applicable timeframe, painting a realistic monetary picture and giving your studio financial clarity.
Insider Insights: Amortization can be found on the accrual basis portion of Walla’s Cash/Sales Report, which focuses on accrual-based revenue. All plans purchased and paid for in advance at your studio, specific to a week or month, will be amortized. It’s important to note that Enrollments are not amortized. The sales section of this report will recognize all revenue from the Enrollment upon purchase, even if the client will be leveraging your payment plans. Please note, gift cards will not show under the accrual basis section as they are a way to pay for a service and are not recognized as revenue until used.
SALES: Accrual Basis: All studio revenue, all in one place
The accrual basis section of the Cash/Sales Report contains products, services, and fees—including taxes and excluding gift cards. This report aims to monitor your studio’s revenue in real-time and reflects plans paid for in advance, which are amortized and shown in that month. That’s why we addressed amortization above! You’ll be able to quickly analyze buying trends, measure recurring revenue, and see if you’re exceeding your business goals compared to previous months. To see a breakdown of accrual-based revenue, this report includes the following:
- Detail: Date, location, and category-based, on this tab, you can review overall monetary totals, daily totals, how and when individual purchases are made, and the status of a client purchase and payment.
- Recurring Chart: Get insight into recurring and non-recurring revenue over a selected period, giving you historical data to view buying trends over time.
- Action Card: Failed payments, payment issues—the section of this report proactively informs you of action-oriented items that need to be taken when collecting revenue, so you’re not left chasing IOUs.
Insider Insights: From enrollments to drop-ins and appointments, use the color-coded, date-based graph on the Detail tab to see precisely how your studio offerings are performing from a purchase perspective. Hover over each bar to see a daily breakdown and use the section of this report to review client buying trends and opportunities you can capitalize to market and sell more plans, for example, to your studio community.
CASH: Cash Basis: Analyze the daily dollars that your studio is earning
While the sales portion of this report is all about overall revenue, Walla’s cash basis section of the Cash/Sales Report is focused on the total dollars in and out in a day—and the revenue attributed to those sales. Daily sales are summarized based on date, location, and category for immediate payments received. It’s different from accrual basis in a few ways. Number one, you will see gift cards show up as a cash sale on this report section as you took in money that day. Next, you will also see real-time cash for enrollments. So, if a client signs up for your teacher training and pays the deposit, you will only see the deposit—not the entire enrollment cost. Lastly, you will see your annual or quarterly memberships total amount paid here, not amortized over the life of the membership as you’d see under accrual basis revenue reporting. Typically you (or your accountant) will want to reconcile bank statements with cash basis, not accrual basis. This reporting includes data on:
- Account Balance: Review the purchase history of the account balance/credit.
- Refunds: Displayed on the date cash/credit purchase was returned.
- Gift Cards: See gift card sales (not redemption), which include the GiftUp! Fee.
This report also contains an overview of the transaction's date, the client name, who made the purchase (you can click out directly to their account), purchase details, cash in/out, and payment method used.
Insider Insights: Since this report accounts for the total cash your studio has received that day, you can easily evaluate sales based on category and pre-set or customizable date ranges. How many intro offers were purchased in January in comparison to February? How much did retail make you in the past year? Utilize this report to track cash flow, dial in your budgeting, and when there’s an opportunity to spend—and save.