Top 3 Accounting Tips for Your Salon Business
The beauty and wellness industry while growing leaps and bounds continues to become increasingly competitive and complex. As such it is only natural that every salon owner tirelessly works create and run an enterprise as lean and as efficient as possible. Thus, it is hardly surprisingly that the salon owner has to don multiple hats and juggle between many roles such as the chief financial officer, chief executive officer, chief human resource officer and chief marketing officer. Although every role has its own importance, it is perhaps the role of chief financial officer that is utmost crucial and invariably the focus area. So crucial is the role that the very existence of the business is dependent on the money management skills. So, here are our top 3 accounting tips which will help you ace the game and recommendation of the tool that will help make the process extremely easy.
From the very start of your business, you need to know what it costs you to keep your store operating every day, every week and every month. A budget is the road map which enables you to make informed decisions with your money and how it is being spent. In other words, it is the self-imposed check and balance of the system that prevents you from going overboard with your expenses in an otherwise tap + go friendly environment that surrounds your money. The task of budgeting is not only preparing a summary of all the expenses such as rent, statutory taxes, payrolls, tips and commissions, working capital requirement, insurance, and other contingencies but also to account for all incomes in the form of sale of services, products, revenue from rentals, advertisements, commissions from promoting products etc. While you may opt for traditional ways to accomplish the task of budgeting by using a pen and paper or an excel spreadsheet, we highly recommend leveraging technology in the form of a salon accounting software. Amongst the host of advantages of using a salon accounting software, we particularly love how swiftly it allows to create budgets, and track the expenses so as to prevent you from going overboard with your expenses. Moreover with features such as variance analysis the software also helps you to easily understand which weeks you went beyond your budget and which weeks you stayed within the budget.
While you are busy managing the operations, and the inventory, someone or something also has to keep a tab on both the receipts and the payments. Thus, the first step after having created your budget is to create ledgers to account for all receipts and all expenses. Irrespective of the mode of expense, i.e. bank transfer, card or cash, each and every expense must be accounted for. Similarly, each and every income must be accounted for. Here also, we highly recommend leveraging technology in the form of salon accounting software in order to not only expedite the process but also to avail the full set of advantages of using a salon accounting software. Working in complete handshake mode with your POS hardware, the salon accounting software is capable of creating real time ledger entries as soon as the transaction is over. Some salon accounting software such as the one from Zenoti are also equipped to seamlessly work with third party applications such as Quickbooks and Xero to enable you to have a complete end to end solution. Aside from the benefit of streamlining and expediting the process, using a salon accounting software to account for all receipts and expenses will also help you reduce the time you spend in accounting. All you then need to do is set aside a day every week, when you shall verify all the records to ensure that nothing is missed or is erroneous
Know Your Numbers
We cannot stress enough on this one. As a salon business owner or manager, it is imperative that you know your numbers. Whether those numbers are daily sales, weekly or monthly profitability, you should have these numbers imprinted in your memory. At any point in time, you must be aware of what your numbers are telling you such that you take informed data driven decisions on how to steer the business. If you’re wondering as to how you can compute these number and the task seems daunting, do know that you always have technology to rely upon. While there are host of advantages of using a salon accounting software our personal favourite is the financial reporting tool, which in just about few clicks creates on-demand reports to show you the complete scenario of your business. What we further love about a salon accounting software is that whether you run a standalone store or multi chain store, the salon accounting software is capable of providing you with both the overall scenario of the business and the individual location specific granular data.
Technology has truly transformed the way how business is conducted and a salon business is no exception. The salon accounting software market is mature with multiple products to choose from. However, having gone through the features of multiple products we like the Zenoti salon and spa accounting software for its state of art easy to use user interface. The software comes with upto 100 pre-set formats to generate easy to comprehend reports such that you are always ready to steer your business in the right direction.