Salons & Spas
Tips, commissions, and booth rentals create complex books. We track compensation, retail sales, and gift cards properly so you know what your salon actually earns.
The Business
A salon looks simple from the outside. Haircuts, color, maybe some retail products by the register. But the money flows in a dozen directions. Some stylists rent booths. Others earn commission. Tips come in cash and on credit cards. You sell shampoo at the register and use it in the back. Every one of those transactions has a different accounting treatment.
Most salon owners got into this business because they are talented with their craft, not because they love spreadsheets. So the books tend to be the last priority. A drawer full of receipts. A vague sense of what got deposited. Quarterly taxes that sneak up. Then tax time becomes stressful guesswork.
Who This Covers
Who This Covers
Hair salons, barbershops, nail salons, day spas, and med spas across MetroWest and Greater Boston. Whether you have two chairs or twenty stations, commission stylists or booth renters, the financial tracking challenges are similar.
What Makes It Complex
What Makes It Complex
Tips need tracking for proper tax reporting. Booth rental income looks different than service revenue. Retail products need inventory counts and sales tax. Gift cards sit as liabilities until redeemed. None of this organizes itself.
What We Handle
We set up your books to separate what needs to be separated. Service revenue tracked by type. Product sales tracked separately with cost of goods sold. Commission expenses calculated correctly. Booth rental income recorded as rent rather than service revenue. Each piece goes where it belongs so your reports actually mean something.
Tip handling matters more than most owners realize. Credit card tips that flow through your merchant account need to get attributed to the right stylists for payroll and tax purposes. Cash tips technically should be reported too. We help you build a system that tracks this properly without creating a burden every night at close.
Commission and Payroll
Commission and Payroll
We track compensation by stylist or technician. Whether you pay hourly plus commission, straight percentage, or tiered rates based on seniority, the payroll gets calculated correctly and the employer taxes get filed on time.
Retail and Inventory
Retail and Inventory
Retail product sales are separate from service revenue and subject to Massachusetts sales tax. We track inventory, calculate cost of goods sold, and file your sales tax so you stay compliant with the state.
Common Problems
The biggest risk for salons is worker classification. Booth renters are independent contractors. They pay their own taxes and you issue them a 1099 at year end. But if you treat them like employees by setting their schedules, requiring specific products, or controlling how they work, the IRS may disagree with your classification. The back taxes and penalties are significant.
Gift cards and prepaid packages are another common mess. When a customer buys a $100 gift card, that is not $100 of revenue. It is a liability you owe until they redeem it. Same with membership packages or prepaid service bundles. Recording these correctly prevents overstating income and understating what you actually owe.
Tip Underreporting
Tip Underreporting
The IRS knows salons are cash-heavy businesses. They have tip rate studies for the industry. If your reported tips look too low compared to revenue, it raises flags. Proper tracking protects both you and your staff from problems down the road.
Product Shrinkage
Product Shrinkage
Inventory that walks out the door unreported is money lost twice. Once on the product itself and again on phantom cost of goods sold that overstates expenses. Regular inventory counts tied to your books reveal the problem before it gets out of hand.
What Changes
You see which parts of the business actually make money. Maybe color services have strong margins while retail barely breaks even after theft and spoilage. Maybe one stylist generates twice the revenue of another but costs about the same. Real numbers inform real decisions about pricing, staffing, and what to promote.
Tax time becomes straightforward. Your CPA gets a clean file with revenue categorized properly, tips reported correctly, and 1099s prepared for your booth renters. The conversation shifts from cleaning up a mess to finding ways to reduce your tax burden legally.
Classification Confidence
Classification Confidence
You know your booth renters are documented correctly as independent contractors. Lease agreements are on file. 1099s go out in January. If questions ever arise, the paperwork backs up your position without scrambling.
Cash Flow Clarity
Cash Flow Clarity
Seasonal swings become predictable. You know wedding season brings a surge and January will be slow. With a rolling forecast, you plan for the dips instead of scrambling when the checking account runs low.
Greater Boston's Trusted Bookkeeping Partner
The Next Step:
A Short Conversation
We'll ask a few questions, figure out what you need, and give you a straightforward quote.