Salons, barbershops & spas
Bookkeeping for salons, barbershops and spas
A salon is often several small businesses under one roof. The books have to tell the owner which of them is making money.
Service revenue, retail product sales and chair or booth rent behave completely differently. One carries labor cost, one carries cost of goods, and one is close to pure margin. Lumped into a single revenue line, they hide each other.
Add commission splits, tips passing through on cards, and a mix of employees and renters, and the bookkeeping question becomes less 'what did we take' and more 'whose money is this, and what is left for the business'.
Where the books go wrong
What we look at first
Service and retail revenue combined
Product sales carry cost of goods and service revenue carries labor. Together in one line, neither margin can be read.Booth rent recorded as service income
Rent from an independent stylist is a different revenue stream with a different cost structure, and it should sit on its own line.Tips run through the business
Card tips arrive in the salon's account before reaching staff. They belong in a liability account until payout, not in sales.Blurred worker classification
Employees on commission and renters who set their own hours are recorded differently. Keeping the arrangement and the paperwork straight matters well before anyone asks about it.
What we do each month
- Service revenue, retail sales and booth rent recorded on separate lines
- Commission calculations reconciled to the payroll actually run
- Tips tracked through a liability account from collection to payout
- Retail product purchases recorded as inventory and relieved as sold
- Card processing fees recorded as a cost rather than netted into sales
- Bank and credit card accounts reconciled, with owner draws kept clearly separate
Setting up QuickBooks for it
Separate income accounts for services, retail and booth rent are the first change we usually make, because almost every other report depends on them.
Where the booking system handles payments, a daily or weekly summary entry into QuickBooks Online keeps the two in step without double counting.
Product inventory can be tracked in QuickBooks or kept in the retail system with periodic adjustments — which one depends on how many SKUs you carry and who has time to count them.
Carey is a QuickBooks Online Advanced ProAdvisor, so a file can be set up, cleaned up or migrated as part of the same engagement — see QuickBooks services.
Reporting
The numbers worth watching
Revenue per chair
Service revenue against the stations producing it, which is where a capacity conversation starts.Retail margin
Product sales less product cost. Retail is often the quiet difference between a fine month and a good one.Labor and commission as a share of service revenue
The largest cost in most salons, and the one that drifts most easily.
Questions we are asked
We have both commission employees and booth renters. Does that complicate the books?
It changes how each is recorded rather than making it difficult. Commission staff run through payroll; booth renters generate rent income and are tracked as vendors if the salon pays them anything. The important part is that the arrangement on paper matches what actually happens day to day.
Can you tell us whether a stylist should be an employee or a contractor?
That is a legal and tax classification question, so the answer has to come from your CPA or an employment attorney. What we can do is make sure the books, payments and records match whatever arrangement you and your advisers settle on.
Start with a conversation
Let's look at your books together
Tell us about your church or business and where your bookkeeping stands. Carey will follow up to arrange a consultation, and you'll receive a written scope before any work begins.