Accounting for the fitness industry in Poland. A comprehensive guide

24.01.2024

Nowadays, the fitness industry has been undergoing a very dynamic development and the number of fitness clubs is constantly growing. As a result, more and more people think of running their own fitness club. Accounting in the fitness industry is one of the most crucial aspects that must be taken into consideration. In this article, we will look at the most important issues connected with accounting of fitness clubs, such as the specific nature of such establishments from the accounting perspective, requirements for a fitness club from the accounting perspective, finances management and form of taxation of the fitness club, the accounting method as well as safety and protection of data in accounting.

The fitness club is a place which offers services within the scope of sport and leisure activities. This article is a comprehensive guide to accounting for the fitness industry in Poland to help you understand the key aspects connected with running a fitness club from the accounting perspective. Regardless of whether you are a beginner entrepreneur or an experienced owner of a fitness club, you will find here many pieces of valuable information that will help you in managing your business.

Accounting for fitness companies is characterized by some specific elements that one should understand in order to run their fitness club in line with the applicable regulations.

Specification of a fitness club from the accounting perspective

The specification of a fitness club from the accounting perspective covers several key financial aspects. Firstly, fitness clubs generate revenue mainly on membership fees, gym cards (such as Multisport and other), sales of own membership cards and additional services like personal training or group activities. Secondly, costs of functioning of a fitness club cover the remuneration of employees, fees for rental and management of the premises, equipment running costs, promotion and marketing. Thirdly, fitness clubs must also take into consideration the seasonal nature and fluctuations in the number of customers, which might affect the stability of revenue.

Forms of business for a fitness club: sole proprietorship or a company?

Owners of fitness clubs can choose between various forms of business for their establishments, such as sole proprietorship or a company. Each of those forms has its pros and cons. Sole proprietorship is simpler by definition and easier to run, but bears a greater financial risk of the owner. A company, especially a limited liability company, allows for limiting the financial risk but involves greater formal requirements and higher costs of operation. The choice of a proper form of business for a fitness club depends on the individual preferences of the owner, size of the club itself as well as plans for its development. It is worthwhile to consult an accounting expert in order to make the best choice for your business.

Requirements for a fitness club from the point of view of accounting

Requirements from a fitness club from the point of view of accounting include, above all, keeping full accounting, preparation of financial statements and settlement of taxes and contributions to the Polish Social Insurance Company (ZUS). Fitness clubs must also stay in line with regulations regarding protection of the customers’ personal data and sales evidence with cash registers. In case of exemption from the obligation to have a cash register (up to the limit of PLN 20,000), sales must be documented in form of the so-called non-accounting sales records, with the acknowledgment of every sales in favor of natural persons or flat-rate farmers.

It should be mentioned that accounting kept for a fitness club can be complicated due to the diversified sources of revenue and costs. That is why owners of fitness clubs should employ an experienced accountant or use services of a professional accounting firm in order to ensure the proper accounting and avoid problems connected with financial irregularities.

Financial management in a fitness club

Managing a fitness club requires a proper approach towards finances in order to ensure profitability and stability of the business. The key aspects of financial management in a fitness club include, among others, monitoring of revenues and costs, budget planning, analyses of financial indicators and the use of proper tools such as the e-fitness software.

The role of chief accountant in managing a fitness club

The chief accountant serves a crucial role in the financial management of a fitness club. He or she does not only need to handle the accounting, but also analyze the financial performance, prepare forecasts and provide advice within the scope of cost optimization and increase of profitability. If the accounting is kept internally, every fitness club needs a chief accountant, regardless of its size, because proper financial management has influence on the long-term success of the establishment.

Scope of duties of an accountant in a fitness club

The scope of duties of an accountant in a fitness club includes, among others:

record keeping of revenues and costs,
preparation of financial statements,
settlement of taxes and contributions to the Polish Social Insurance Company,
analyses of financial indicators,
budget planning,
cost optimization,
monitoring of financial liquidity,
monitoring of receivables and liabilities.

It should be highlighted that the accountant’s duties may differ depending on the size of the fitness club and form of operation. At such clubs, the accountant can be responsible for the entirety of financial management while in larger organizations they can cooperate with other specialists, such as financial controllers or financial analysts.

E-fitness software as the tool supporting financial management

The e-fitness software is an advanced tool that can facilitate the financial management of a fitness club. The e-fitness system allows for automation of many accounting processes such as evidencing of revenues and costs, generation of reports or settlement of taxes. What is more, the e-fitness software offers a set of analytical features that help in monitoring the financial indicators and in budget planning.

The use of e-fitness software brings many advantages, such as time saving, increased efficiency of the accountant’s workflow and better supervision over the finances of the fitness club. People should then consider implementing such a system at their club in order to improve financial management and contribute to the long-term success of their business.

Taxation form of a fitness club

The choice of the right taxation form of a fitness club is of key importance for the optimization of costs and increasing the profitability of the business. In this section, we will discuss various options of taxation by analyzing their pros and cons in order to help fitness club owners make the right decision.

Determination of the Polish Classification of Business Activity code (PKD)

First, it is necessary to determine the Polish Classification of Business Activity code (PKD) for the fitness club. PKD is the Polish system of business activities that allows business owners to clearly define the type of their conducted business operations. In case of fitness clubs, the most frequently used PKD code will be 93.13.Z – “Operation of fitness activities”. Determination of the correct PKD code is very important for the correct settlement of taxes and contributions to the Polish Social Insurance Company.

Taxation of a fitness club – choosing the optimum form

Owners of fitness clubs can choose from several forms of taxation, such as:

personal income tax (PIT),
corporate income tax (CIT),
registered flat-rate revenue without deducted costs.

The choice of the optimum form of taxation of a fitness club depends on many factors, such as the size of the club, its form of business (sole proprietorship, civil law partnership, limited liability company, etc.) and the expected revenues and costs. One should consult an accountant or a tax advisor in order to make the right decision that will let them minimize the tax burden and optimize the costs.

When opening a fitness club, the entrepreneur is obligated to register for social insurance at the Polish Social Insurance Company (ZUS). The legal form does not matter here – regardless of whether the person runs their business in form of sole proprietorship or as a civil law partnership. The registration must be made not later than within 7 days from the date of incorporation of the business. The proper calculation of contributions to the Social Insurance Company for a fitness club is necessary to avoid problems related to settlements and possible penalties. Contributions to the Polish Social Insurance Company include social insurance (pensions, disability, sickness) and health insurance. The amount of contributions depends on the form of business activity, type of contracts with employees, and the generated revenues.

In the case of sole proprietorship, the entrepreneur who is a beginner or generates small revenue is entitled to relief thanks to which the contributions paid to the Polish Social Insurance Company will be lower from the standard rates. In the case of companies, contributions to the Polish Social Insurance Company are calculated for every partner and person employed under a contract of employment, contract of mandate or contract for a specific job. One should consult an accountant or an advisor of the Social Insurance Company in order to make sure that the contributions are calculated correctly and in accordance with the applicable regulations.

Summing up, the choice of the proper taxation form of a fitness club, determination of the PKD code and the proper calculation of contributions to the Polish Social Insurance Company are crucial for the optimization of costs and increasing the profitability of the business. It is worth to use the help of specialists to make the right choices and avoid settlement-related problems.

Accounting firm vs. independent accountant

Owners of fitness clubs must decide whether they will employ an independent accountant or use the services of an accounting firm. In this section, we will compare the advantages and disadvantages of both solutions in order to help you make the right decision.

The advantages and disadvantages of employing an independent accountant

The job of accountant at a fitness club can be carried out by an independent specialist that will be responsible for the entirety of accounting matters. When deciding on such a solution, you should consider the following advantages and disadvantages:

Advantages:
- individual approach towards the needs of the club,
- fast response to the needs of the club.
Disadvantages:
- high costs of employment,
- no support in case of the accountant’s illness or holidays,
- need for continuous training and knowledge updates.

If you decide to employ an independent accountant, you should remember that being an accountant does not only stand for acquiring proper qualifications. It also involves constant honing of one’s skills and knowledge within the scope of tax and accounting regulations.

When to decide on using services of an accounting firm?

Using the services of a professional outsourcing accounting firm is the perfect alternative to employing an independent accountant. By choosing this solution, you should take into consideration the following criteria:

the size and scale of operations of the fitness club,
the number and type of financial transactions,
the need for support within the scope of tax and accounting consultancy.

If you decide that you should outsource bookkeeping to an external accounting firm, you can expect advantages such as:

constant accessto experts in your field of business,
possibility to use accounting services on demand,
optimization of costs related to accounting,
access to specialist knowledge of experts,
guaranteed safety and uninterrupted services,
guaranteed correct interpretation of regulations.

Safety and protection of data in case of accounting in the fitness industry

In times of digitization and the growing number of cyber-attacks, data safety and protection of personal data are becoming the key aspects in accounting of every industry, including fitness clubs.

Protection of personal data in accounting for the fitness industry is extremely important because fitness clubs collect and process a great amount of information about their customers, such as contact details, payment details or information on participation in activities. Thus, it is necessary to stick to the following rules:

comply with the GDPR regulations,
protect personal data against access of unauthorized persons,
regular updates of software and protection systems,
training employees within the scope of personal data protection,
monitoring and supervision of the access to personal details.

Compliance with those rules will ensure efficient protection of personal data of the customers and help to avoid possible financial penalties resulting from a breach of personal data protection regulations.

Data safety rules in the e-fitness system

The operating system, as the tool supporting financial management of a fitness club, must meet high data safety standards. The key features of such a system that contributed to data protection include:

encryption of data sent via the Internet,
use of passwords and multi-factor authentication to secure access to the system,
regular data backups,
monitoring of and responding to attempts of unauthorized access,
use of physical safety measures, such as a combination lock or monitoring of access to the server room.

By caring for data safety in the ERP system, owners of fitness clubs can expect that the information on their customers, financial transactions and other aspects of business are properly protected against risks related to cybersecurity.

Conclusions

In this article, we have presented the main aspects concerning accounting for the fitness industry. Accounting in the fitness industry requires taking into consideration many specific aspects, such as the form of taxation, bookkeeping requirements and protection of personal data. The use of well-proven systems and cooperation with experienced accountants can greatly facilitate the management of finances of a fitness club and ensure its proper functioning on the market.

Author: Katarzyna Suchożebrska, Manager at the MDDP Outsourcing accounting office in Warsaw

back to the list