A Golf Financial Auditing Deep Dive
Numbers don’t lie.
Auditing golf club financial statements tells an important story about how efficiently a facility is being operated. Statements are not always easy to decipher given inconsistent accounting practices and coding procedures, but with enough persistence, the numbers always tell an objective story.
Getting into the numbers isn’t enough though.
What metrics and ratios are most important?
How does your club compare with other similar clubs?
Where are highest priority areas that will produce most immediate impact on the bottom line without sacrificing customer experience?
Many Don’t See a Problem Until Too Late
For instance, in smaller clubs with less than $2 Million in gross annual revenues, payroll exceeding 38% of their revenue figure is virtually a death sentence. These numbers change substantially when there is debt service, taxes, or other market circumstances involved.
Effective golf financial auditing along with industry statistical comparison reveals ratios and performance benchmarks that indicate the health of country clubs.
The problem is that only very rare is the case that decision-makers and hired staff have the time to roll up their sleeves and dig into the granular details.
Most club decision makers will have extensive breadth of knowledge when it comes to managing club expenses. The depth of their knowledge into each individual line item (or lack thereof) often leaves much that slips through the cracks.
“For clubs with less than $2 Million in gross annual revenues, payroll exceeding 38% of their revenue figure is virtually a death sentence.”
Golf Financial Auditing Misconceptions
There’s a phenomenon where Owners, Board Members and General Managers naturally tend to assume that others are digging into the details. The misconception is that they’re only responsible for the “big picture” while subordinates, or the “other” people are responsible for running a tight ship. The result is that nobody takes care of the details.
Another typical misconception is a result of past success. Club owners, Board Members and even General Managers are in their position as a testament to their past success. They’ve built up successful businesses, law practices, medical operations, and generally they have succeeded in life.
It’s difficult for a group like this to believe that their country club is failing.
So, unless you’re turning over stones aggressively, and your team has intimate knowledge of what it is you’re looking for, you just bite might be missing a bunch of opportunities to save money for the club.
There may be big wins that the club is missing out on, or if the club is faltering, the fix could be simpler than anyone thinks. Fresh eyes and insights are generally advisable.