You HAVE To Run the Numbers!

IMG_8384-634Bird Shoal near Beaufort, North Carolina

I subscribe to a number of email lists.

Among other things, I enjoy reading what’s on the minds of the movers and shakers in the world of online business and travel.

Ramit Sethi is the author of the well-known but unfortunately named site, I Will Teach You To Be Rich. Despite the name, he actually offers solid advice and guidance in a number of areas.

I recently subscribed to his list.

He sends out some interesting emails with often colorful language, but one last week caught my eye, because Ramit was thinking like an accountant in the best way possible.

Now lest he discover my assertion, and not take kindly to being told that he thinks like an accountant, let me explain.

The email to which I refer had in the subject line: [Read more...]

Keeping it all in Balance…All You Need to Know About the Balance Sheet

IMG_7341-700Heading into the sunset on Beaufort, NC’s Lookout Cruises!

We’ve discussed owner’s equity in I Own What? Travel Professionals and Owner’s Equity. 

We’ve talked about liabilities in I Owe How Much?! Liabilities, Accounts Payable, and Travel Agents, and we’ve chatted about assets in Hey! When do I get paid? Travel Agents, Assets, and AR.

Exciting stuff I know, but having even a cursory understanding of those three things will help you to understand exactly what’s going on in your business:

Assets, Liabilities, and Owner’s Equity.

Those three things make up one of the staples of what we accountants call financial statements.

Financial statements are sets of reports in a specific format that offer information about an organization’s activities. [Read more...]

Does Your 1099 Add Up? Income and Expenses for Hosted Travel Agents!

IMG_0839-700On the beach at North Carolina’s Fort Macon State Park

If you’re an independent contractor/hosted agent, sometime in late January you’ll normally get a little surprise in your mailbox:

A 1099 from your host agency.

Don’t let that surprise you as your host should be sending you one every year…but, if it’s your first year in business that 1099 may raise an eyebrow…it did with me.

What is a 1099? We’ve all gotten them before, they should look familiar, but what are they, exactly?

1099 is the title given to a series of documents created by the U.S. Internal Revenue Service (IRS). 1099s are information returns (returns filed with the IRS and others that are for information only) used to report certain types of payments or income to the individuals or organizations receiving those payments.

You’ll receive a 1099 from your host because your received money – hopefully gobs and gobs of it – from your host throughout the year. [Read more...]

I Own What? Travel Professionals and Owner’s Equity

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A long time ago in a galaxy far, far away – in Montana’s Bridger Mountains just north of Bozeman

Understanding Owner’s Equity requires just a little math.

…the horror…the horror

I know, I know the only thing more painful than accounting is math.

No one ever really believes me on this one, but it really is true: you in no way have to be good at math to really know your accounting.

To fully understand accounting, you just need basic addition, subtraction, and division… [Read more...]

I Owe How Much?! Liabilities, Accounts Payable, and Travel Agents

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Along the boardwalk in Beaufort, NC

We’ve talked a little about accounting in general.

Remember the definition of accounting?

Accounting is simple a system for tracking and reporting the results and activities of an organization…no more, no less.

We’ve also talked a little about assets.

Remember what an asset is?

An asset is just a thing, a resource. It is something you control – tangible or intangible – that brings value now and in the future.

Cash is an asset.

We talked about something called Accounts Receivable or AR.

AR an asset that represents amounts owed to an organization by others.

In our past example, we used commissions owed to a travel agent by a cruise line. [Read more...]

Yes, But…Thoughts on Deducting Cruises for Business

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Hanging out with Pluto on Castaway Cay!

You’re a travel professional (consultant, agent, writer, blogger, location independent entrepreneur) and you’re interested in a new area, destination, or type of travel. You plan a trip of your own to explore this new destination.

You self-fund this trip.

You’re not going along on a fam or a press trip organized and funded by someone else, but you’re paying for this through your own money or your business’ money.

Is this tax deductible?

Let’s say you’re a travel agent/consultant who is beginning to assist clients with Disney Cruise Line sailings. But, you’ve never been on a Disney Cruise, and you need some first hand experience. You book a trip for you and your family on one of Disney’s 3-day sailings from Port Canaveral to the Bahamas with a stop at Castaway Cay. [Read more...]

What do Travel Agencies, Accountants, and the French have in Common?

IMG_1198-1A Beaufort, NC sunset

Sometimes it’s pretty hard for folks outside of the accounting profession to see the value of accounting. Travel agents and others who are immersed in the business of travel or who spend much of their time traveling are particular challenges for we accountants.

Helping you see the value and importance of accounting is what I see as one of my most important jobs.

It’s a tough one, though.

To make it a little easier, I like to find interesting connections between the worlds of travel and accounting.

Sounds like a stretch, doesn’t it? Sometimes, but not always.

Take France for instance. [Read more...]

Hey! When do I get paid? Travel Agents, Assets, and AR

PolyFamily-634Enjoying an evening at the Polynesian Resort, Walt Disney World

One of the quirks of accounting for travel agencies is a little thing called an asset, and specifically an asset known as accounts receivable… or more affectionately, AR.

Why is AR quirky for travel agencies?

But first, what is AR?

AR is an asset.

Well, then what is an asset?

Remember my definition of assets from 5 Easy Ways for Travel Agents to Learn the Accounting Language (what am I saying, of course you do):

An asset is a thing, a resource. It is something you control – tangible or intangible – that brings value now and in the future.

Cash is an asset.

It’s a thing. You control it, and it will be worth something to you in the future. [Read more...]

5 Easy Ways for Travel Agents to Learn the Accounting Language

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Another Beaufort, NC sunset

Learning the basics of accounting is no different that picking up some key phrases from another language before traveling internationally.

It really should be a breeze for the travel pro!

You wouldn’t set off to France without a bit of French or to Russia without some basic Russian phrases, would you?

Of course not!

You shouldn’t set off on the entrepreneurial adventure of building a travel agency without knowing a little of the language of business:

Accounting.

Accounting…ugh!

Exciting, I know…but, that little bit of accounting will help you immeasurably in understanding the details of running your business. [Read more...]

Just What is Accounting Anyway?

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Sunset in Beaufort, North Carolina

You love travel.

That’s probably the main reason you became a travel agent, isn’t it?

I bet sometimes you enjoy your job so much that it’s not even work anymore (especially when you’re on that next Jamaican FAM)!

Why should you care about accounting?

Accounting…ugh

Mere mention of the word can bring about a visceral negative reaction in most travel agents. At the word “accounting,” many travel-lovers completely tune out. It’s as if the person talking about accounting is speaking a different language.

And that’s exactly what the accounting is, a different language.

Accounting…different language…foreign country…international travel…it just doesn’t quite work, does it, making that connection between accounting and travel? [Read more...]