Where salons and beauty pros books go wrong
Card processors pay out services, retail and tips in one deposit, minus fees. If the deposit is booked as one sales figure, tips you owe to staff look like your income and product sales disappear into services.
Back-bar product used on clients and retail product sold to clients are bought from the same distributor. Without separate accounts, retail margin is invisible.
Owners who collect booth rent often record it as service income, and renters often pay it from a personal card. Both make the year-end summary harder than it needs to be.
Accounts we set up for salons and beauty pros
Your chart of accounts is reviewed during onboarding. These are the lines that usually matter most in this kind of business:
| Account | Why it is separate |
|---|---|
| Service income | cuts, color, nails and treatments, by provider if you want |
| Retail product sales | kept apart from services so retail margin is visible |
| Booth or chair rent received | for owners who rent stations to independent pros |
| Tips collected for staff | a pass-through account that should clear to zero after payroll |
| Back-bar supplies | color, foils and disposables used on clients |
| Retail inventory purchases | product bought to sell |
| Card processing and booking app fees | so you see the real cost of each payment method |
Records the IRS describes
The IRS says employees must report cash tips, which it says include credit and debit card tips, to the employer by the 10th of the month after they are received, unless the tips from that employer total less than $20 for the month. Employers keep those reports, and reported tips go in box 1 of the employee's W-2. Source: IRS: Tip recordkeeping and reporting.
The IRS also says employees should keep a daily record of tips received. For an owner, the point-of-sale tip report and the payroll provider's tip totals are the two records we tie together each month. Source: IRS: Tip recordkeeping and reporting.
Cash register tapes, deposit information and receipt books are on the IRS list of records that support gross receipts. A salon's daily close-out report is that record. Source: IRS: What kind of records should I keep.
How long to keep them: the IRS says three years in most cases, longer in some situations, and at least four years for employment tax records (IRS: How long should I keep records?).
Cash through the year
Many salons are busiest before holidays, prom and wedding season, and quieter in the weeks after New Year. Product orders often land before the busy weeks, so cash can dip right before the strongest month.
Booth renters pay their own rent on a weekly or monthly cycle. A renter who tracks income weekly is rarely surprised when the rent or the quarterly estimated tax payment comes due.
Contractors, employees and year-end forms
Whether a stylist is an employee, a commissioned worker or an independent booth renter is a classification question. The IRS weighs behavioral control, financial control and the relationship of the parties, and you can ask the IRS to decide with Form SS-8. We keep the records for the arrangement you have and flag mismatches, such as a renter whose tips run through your payroll.
If you pay an independent pro for services, Publication 1099 sets a $2,000 reporting threshold for tax years beginning after 2025. Your tax preparer decides who receives a form.
What the monthly service includes
Every month, the same close the bookkeeping page describes: transactions categorized, bank, card and loan balances reconciled to statements, a profit and loss and balance sheet delivered, and a short list of questions instead of guesses. The books stay ready for your tax preparer at year end. For salons and beauty pros, that close also covers:
- Processor payouts split into services, retail, tips and fees
- Tips collected tied to the tips paid through payroll
- Retail margin shown apart from service income
Need more than the books? The service levels page describes a monthly review and CFO-style planning on top of the same close.
How remote onboarding works
- Tell us about your books. The short form asks what your books live in today, how many transactions you have a month, how many bank, card and loan accounts, how far behind the books are and what you need. You can ask for a 15-minute call instead of an email reply.
- Written quote and engagement letter. We review what you sent and reply with the scope and monthly price in writing before any work starts.
- Access, without passwords. QuickBooks Online: you invite us as an accountant user. Xero: you invite us with the Advisor role. Excel or Google Sheets: you share the workbook and we send a folder for statements. Nothing yet: we recommend QuickBooks Online or Xero and set it up in your name. You keep ownership and can remove our access.
- Opening balances and a close day. We confirm your accounts, collect recent statements and your prior-year return or financial statements, check opening balances, and agree the day each month's books are delivered.
What helps most for salons and beauty pros:
- Your booking or point-of-sale system's monthly sales and tip reports
- Payroll provider reports, if you have staff
- Any booth rent agreements, if you rent stations
Price
These are the starting prices the quote form uses. Your written scope sets the final price before any work begins.
| Transactions a month | Monthly bookkeeping | Catch-up |
|---|---|---|
| Up to 100 transactions a month | From $450 a month | $300 per month behind |
| 100 to 300 transactions a month | From $750 a month | $450 per month behind |
| 300 to 600 transactions a month | From $1,200 a month | $700 per month behind |
| Over 600 transactions a month | Custom quote | Custom quote |
- 2 bank, card or loan accounts are included; each additional account is $35 a month.
- Books kept in Excel or Google Sheets add $100 a month; starting from nothing adds a one-time $400 software setup.
- Reconciling the payroll your provider runs adds $100 a month.
Prices shown are starting estimates, not quotes.