October 12, 2023

Overcoming Accounting Challenges in Pet Daycare

Accounting 101: Doggie Daycare

What is the importance of accounting for pet daycare businesses?

If you’re looking to run a successful doggie daycare, accounting is important because it helps you manage finances. It aids you in analyzing dog daycare costs, pricing, and dog daycare profit margin. It also helps you make doggy daycare business plans and forecasts, comply with tax laws, and create reporting. If your financial records are managed and accurate, you can use financial data to make informed and accurate decisions about how well your business is currently operating, and plans for the future, like opening new locations, or hiring new staff. By taking a look at dog daycare costs, you can become more efficient by eliminating potential unprofitable expenditures, like ceasing to sell a type of dog food that expires quickly and does not sell well. It’s also important to analyze your pricing. Are you charging $25 for a day of doggie daycare, but the larger location down the block charges $40? Are you losing money because the costs of labor and inventory have increased over time due to inflation? You can analyze your costs to see what you should be charging, or how much you should be paying your staff. Tax law compliance, while not the most glamorous subject, is incredibly helpful to potentially avoid fees and penalties from the IRS. And finally, reporting helps you create business plans. That way, if you’re looking to receive investment money or a loan, or even get acquired by another company, you can be prepared to show stakeholders a snapshot of how the business is doing. And while your doggie daycare might be doing just fine, if you don’t solve some of these accounting issues, you might lose potential revenue, sell products that aren’t profitable, not get all the tax write offs you deserve, or get dinged by the IRS for lack of compliance.

What are the common accounting challenges faced by pet daycare businesses?

Running a pet daycare business takes myriad skills, like effective communication with dogs (and their humans!), working well with vendors and employees, and marketing your business. You may have all those skills in the doggy bag, but may not be the world’s best accountant. You might struggle with logging expenses and revenue, managing inventory, complying with regulations, and finding insurance that works for you. After all, it’s time consuming to track revenue and expenses, especially if you perform multiple services, like daycare and boarding, not to mention selling products at your daycare. And it’s hard to track down paper receipts for potential tax write-offs. Without proper software, managing inventory by hand – counting leashes, tallying chew toys, is equally arduous, as well as remembering whether you need to reorder that doggie shampoo or get rid of that squeaker toy that’s been discontinued. It’s also difficult to comply with your city, state, and country’s legal regulations if you don’t know what they are, and don’t have an in-house counsel or someone to go to for legal advice. And there are many types of insurance for dog daycare that protect you from risks and liability, so it may be difficult to suss out which you’d want to purchase.

What are the solutions to the challenges of accounting for pet daycare?

If you’ve been struggling with one or more of the above issues, know that getting help is possible with a qualified accountant who has experience in your niche, or working with dog daycare accounting software like PetExec. Accountants will work with you on the entire process of opening and running a dog daycare business, from educating you about tax laws so you can decide if your business is an LLC, an partnership, corporation, or sole proprietorship, to registering for an EIN, balance your books, remit taxes from payroll and sales (if your state requires sales tax), and finally, file taxes quarterly or annually. Dog daycare software can be a more cost-effective solution, or may be helpful if you have some of these legal questions sorted already and can do your taxes well. Software can also be more efficient than working with an accountant because it can automate data entry, invoices, and payments, among other crucial but repetitive business steps.

How can accounting software help address these challenges?

Accounting software can help you maintain, expand, and grow your doggy daycare business, by starting you off on the right financial foot. Dog daycare is a marathon of a business, and accounting software will give you precious time back in your day. PetExec is a pet industry-specific pet management system that works for groomers, dog daycare owners, and more. PetExec, for example, can streamline and automate your reporting, so you can keep track of every income stream. Keep an eye on revenue, projections, comparisons, and view statistics whenever and wherever you want! And we mean whenever, because PetExec is cloudbased, and wherever, because PetExec operates internationally. You can also pull reports on employees, vets, and owners. If you sell tons of products like dog food or toys, you can log all of that inventory on PetExec. Set up products and vendor information, monitor quantity, and then run reports on your inventory.. And if you already have a billing system going, no sweat: PetExec has an export function with QuickBooks, the nation’s leading accounting software. Finally, PetExec isn’t just a software suite. It’s also a community where you can connect with fellow dog daycare owners, also known as Packmates, to share resources and tips.

Conclusion

No matter whether you go down the accountant or the accounting software route, or utilize a combination of both, a healthy doggy daycare business means serving more four-legged friends, more dog smiles, and more good boys and girls coming through your facility. We know that choosing a dog daycare software or a specialized accountant can be tough, but once you’ve gotten started, you’ll see how much easier tracking your business’s financial state can be.

PetExec Demo

If you’re considering trying PetExec for your dog daycare, dog grooming, dog boarding, or dog training business, you can try our software risk-free. PetExec can offer a one on one where you can walk through the entire business suite with a friendly staff member via a webinar, or on your own time in our free demo. Head to https://www.petexec.net/demo-and-webinar to find out more.