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...]

Why you SHOULD be thinking about commission splits!

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Nothing to do with commissions, just a cool shot from North Carolina’s Sand Dollar Island

This post is short, it includes free stuff, and it deals with a subject that I know is close to all of your hearts:

Commissions

Commission splits specifically.

Really understanding how your commission split works can help improve your bottom line, instantly.

How?

Back in June, Meredith Hill of the Gifted Travel Network and the Global Institute for Travel Entrepreneurs published a great piece on analyzing commission splits with your host agencies.

I am quickly becoming a fan of Meredith’s, and you should check out her article.

Just to summarize, Meredith is encouraging us to take a close look at the plans available from various hosts so we’re not giving away commission dollars that could be ending up in our wallets.

That 70/30 split sounds great, but is it?

Well…that depends. [Read more...]

Let’s Go See the Swimming Pigs! Travel Agents, Tax Deductions, and Self-Funded FAM Trips

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Sandals Emerald Bay, not far from the swimming pigs!

How many of y’all have been to see the famous swimming pigs of Big Major Cay in the Bahamas’ Exuma chain?

We haven’t.

It’s close to the top of Jennifer’s desperate-to-visit list.

Since we love selling relaxing getaways to Sandals resorts, a trip of our own to nearby Sandals Emerald Bay might be a good way to combine a little work with a trip on the desperate-to-visit list.

This is the sort of trip that nearly every travel pro takes and one that I like to call the self-funded FAM trip.

Your might wonder:

Is a self-funded FAM tax deductible for a travel business owner?

Let’s run through the answer, and discuss some of the finer points of tax deductions for travel agents (you really do have to incorporate a few swimming pigs to make a discussion of tax deductions more tolerable). [Read more...]

Power of Social Media for Travel Pros – It May Not be What You Think

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A Beaufort, North Carolina Sunset

Social media can have some serious downsides.

We’ve all heard the sucking sound that, if you’re not careful, represents time “spent” (read: wasted) on non-value-added social media “work” (read: playing around).

We all are or should be familiar with the client-centered benefits of social media.

Social media is yet another way we can connect with, and offer assistance and value to others.

But, can social media do more?

Yes, and I have a great example. [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...]