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Visit Polymath.com for information about our financial and strategy services for tour companies!

For Tours & Activities Companies

@PolymathLLC
Creating a healthy business

Stable Seasonal Cash-flow


Deposits/prepayments
Understanding tour profitability
Making sure YOU get paid!
Cash management
• Hello, I’m Ingrid Edstrom!
Bookkeeping & Business Advisory Services for the Tours Industry
Leaders in the accounting world, teaching about evolving relationships &
tech.
 Total nerds. We learned this stuff so you don’t have to!
We Love Travel!
Lots of FREE educational resources on Polymath.com.
How does this make you feel?
Effective reports make life awesome!
• Answer your important questions
• Know what’s working and what’s not
• Learn effective pricing & budgeting
• Gain confidence!

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Fundamentals:

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Current Results:

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A Simple Solution:

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New Results:

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This is what that looks like…

@PolymathLLC
This is what that looks like…

@PolymathLLC
This is what that looks like…

@PolymathLLC
This is what that looks like…

@PolymathLLC
This is what that looks like…

@PolymathLLC
EFFORTLESS BOOKKEEPING
Preliminaries

Things you need to start with:


•Booking software to record your customer transactions
•Accounting software to organize all of your financial data
•Organized chart of accounts with class tracking or
job-costing to see income separated by tour
•Understanding your basic reports
•Proper accrual-based accounting methods
•Deposit account that holds unearned income in trust
Then we can get into seasonal planning!
@PolymathLLC
The time has come....

Welcome to the Cloud!

Choose your software well


•Accounting Platform
•Booking/Reservation System – Be sure to check out the #TourAppStudy!
•Additional Apps
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PENNY-RICH POUND-POOR
SOFTWARE NEEDS

•Accounting Platform
•Booking/Reservation System
•Additional Apps
ATLAS
“Apps for Tours Leisure and Activities Sales”
Visit Polymath.com for more information.
Please spread the word!
Organizing your books
DIVERSITY VS. COMPLEXITY
• Are your offerings complicated?
• Are all your eggs in one basket?

Complexity
Diversity
Clear Reports for Unique Needs

•Types of income
•Direct expenses and gross margin for each type of income (COGS)
•Class Tracking or Job Costing – Separating income streams
•Cost accounting & Pricing
•Budgeting for overhead, including YOUR LIFE
RETAIL COMPLEXITIES
COMPARING OUR NEEDS
DIRECT VS. INDIRECT EXPENSES
Direct Indirect
CLASS TRACKING & JOB COSTING
REPORTS = EVALUATED EXPERIENCE
Profit and loss report

The Movie of your Business!


 AKA: The Income Statement

Income
- Cost of Goods/Cost of Sales
= Gross Profit
- Overhead Expenses
= Gets us the Net Profit!
Balance sheet

The Photograph of your Business!


 What you own, owe, and are worth at this moment.

Assets
- Liabilities
= Equity (Net Worth)

 Always accumulative
over all time
Cash vs. Accrual &
Managing Prepayments
• Counting your Chickens!
• Do you want to include your UNPAID bills and invoices on your reports?
• For Tax Purposes
• For Management Purposes
• A/R & A/P
• Important for understanding when income is EARNED

• Must use invoices dated with tour date


• Then date payments for date received
• A/R Prepayments – A/P Prepayments
= Amount of money that may be refundable
Cash flow

Recording money in and out


 Double-EntryBookkeeping: What
happens behind the scenes?
 The Basics of Debits and Credits
 How this affects reports
 WE LEARNED THIS SO YOU
DON’T HAVE TO.
 I’m happy to explain it if you
want me to.
Seasonal Cash Flow

Recognizing and planning for trends


•Review historical reports, noting trends of income and gross margins
• Use this to plan when you can expect income in the future
•Review your monthly overhead expenses
• What is your “Monthly Nut?”
• Does your income for the year cover expenses?
• If not, time to make some cuts!

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Common Pitfalls
•Human Psychology
•Feeling flush -> Feast & Famine
•Double-Allocation
•“Plowing-back” into the business
•Business Hurdles
•Seasonal hiring
•Annual/Quarterly large expenses
•Unexpected disruptions
•Tax time!

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Strategies for Success

Recognizing and planning for trends


•Allocating Your Gross Profit by Percentage
•Cutting Expenses – Trimming your “monthly nut”
•Forecasting & Projections Techniques
•Collaboration – Compare with Colleagues!

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Allocating Gross Profit by %
Gross Sales Income =
% of itself

-Cost of Sales :
% COGS

Gross Profit :
% Gross Profit Margin

- % Payroll % Other % Profit to


(In season & % Owner Pay % Taxes Overhead stay in the
out) Expenses business

• Build account buffers for unexpected disruptions


All of this together cannot equal more than 100%.
Expense Cutting:
Trimming the “Nut”
•What if you are spending more than you are making?
•Employees: Do you have any “warm bodies” on your team?
•Marketing: Where are your customers hearing about you?
•Bank Fees & Interest: Are the biggest waste!
•Dues and Subscriptions: Are you being intentional?
•Check for outliers: Does anything stand out?
•Review your top 3: Do they make sense?

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Forecasting & Projections
•Use software – not spreadsheets
•Set KPI’s – Key Performance Indicators
•Product/Service review

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Collaborate & Compare
•Software Needs
•Income & Expenses
•Customers Served
•Marketing Strategies
•Seasonality
•Location

@PolymathLLC
Creating a healthy business

Stable Seasonal Cash-flow


Deposits/prepayments
Understanding tour profitability
Making sure YOU get paid!
Cash management
The Next Step

If you only do one thing: Open a New Bank Account

•Start by setting aside a minimum of 1% of your income just to get in the habit of
putting money away every month.

If the rest is overwhelming, remember that you don’t have to do it alone!

@PolymathLLC
We are happy to help!
More useful resources…

• Join the “Cultural & Adventure Tour Leaders - Business Strategy Group” on Facebook at
facebook.com/groups/TourStrategy
• This is where we hold discussions, share resources, and post useful info for FREE.
• Sign up for our newsletter
•Visit Polymath.com for articles, videos, and other free resources, and the #ATLAS!
•Fill out our potential client questionnaire to schedule a free consultation!
• Visit Polymath.com & click “Get Started.”

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Together we can make a difference.

Budgeting for Seasonality in Tours


& Activities Companies

Thank You!

Visit Polymath.com for information about our


financial and strategy services for tour companies!

@PolymathLLC