The idea of generating reports, reading and interpreting data, keeping records and then making decisions from all their data information, is crucial to many club owners. For others, it is more painstaking than anything. It doesn’t have to be that hard. Basically, you should be able to “feel the pulse” of your club with just a few critical reports.
I summarize these into the following:
• Data/Member Profile Report
• A Sales/Revenue Analysis Report
• EFT Billing Journal and Monthly variance comparison
Depending on your club management software, these reports may go by different titles but should ultimately reflect similar information. This must always be noted with the fact that the information you get out of any software is only as good as the information and data that went in. The first two reports should be quick, one page summaries.
These reports alone will give you a quick snapshot of the business. A profile report can be related to a business balance sheet as it’s an ever-changing set of numbers, but it tells you exactly where you stand today. The idea behind a report like this is to tie out to the number of records in a club’s database and to give the user the confidence that all members are being counted. Keep in mind that a report like this is only accurate on the day that it is run. Your database is dynamic, not static, every time a change is made in the system, the club profile will change.
To get valid month-to-month comparisons, owners and general managers should run their reports at the same time every month. For example, run the reports after all paperwork has been entered for the month that just ended. Some owners will even create charts to show month-on-month comparisons. This is just another good reason to utilize one billing day per month. It is far easier administratively and there’s never any error or delay in forecasting monthly billing revenue.
Profile comparisons allow for clubs to understand the movement of memberships in or out of their “core”, the number of active accounts in their database. This should be done when clubs can’t account for new member sales not increasing their core number as expected. Briefly, a club’s “core” is the total of monthly paying memberships plus the number of prepaid memberships. Short-terms, barters, and promotional memberships should be accounted for separately as should the total number of cancelled and/or expired memberships. Another critical aspect is the segregated number of accounts that are in “limbo”, those that have fallen off billing, those waiting to get completed, or those that have just fallen through the cracks and are not being accounted for properly. Often times, this is missing revenue that is recoverable.
Accounting information such as a Sales Analysis report, is important for clubs to derive important financial information about their facility. If used as designed, this allows clubs to quickly see where they are in revenues on the bases of Week-to-Date, Month-to-Date and Yearto- Date. Many programs are not designed to be accounting programs, but rather ones that record the source information to be posted into a separate software that produces financial statements.
Most club management software packages utilize accrual basis accounting versus gap accounting which means that revenue is recognized when the service is rendered, whether paid for or not. The goal is to match revenues to the expenses required to render the service. For example, with the sale of a package of 10 personal training sessions, 1/10 of the revenue will be recognized as each session is “redeemed” or used. This would match to the payroll expense paid to staff for training the member. The unused sessions are considered a liability (owed) until redeemed. This mindset also applies for gift certificates and/or house accounts where members “pay ahead” for services to be rendered later.
Monthly billing reports, more-so the comparison to the previous month, show growth or loss in the dues line, the lifeblood of the club business. This information is captured and derived by tracking the additions and subtractions to the billing journal. Clubs who track sales and increases/decreases to the dues line often monitor this information daily to ensure clean records. Cash flow predictability assists with spending and expense management.
Other reports that are beneficial to proper management include:
• Customer Prepayments/Deposits for Services on Record
• Deferred Revenue/Prepaid Membership Liability report
• Attrition/Tenure reports
All owners should minimally be able to generate the above types of reports at any time. Many keep a three-ring binder with title tabs and 12 months worth of printouts where they can quickly assess the information to discuss at any time.
Carole Oat is the National Sales Manager with Twin Oaks Software. She can be contacted at 860.829.6000, or by email atcoat@tosd.com, or visit www.tosd.com.
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Carole Oat is a national sales manager at Twin Oaks Software and a former club owner and operator for 15 years. She can be reached at coat@tosd.com or 860.829.6000 x 281.
