In my five years working with salon owners (including hair loss and hair extension specialists) and salons with teams of 10 or more, I’ve noticed a pattern: using general expense categories that don’t align with your industry makes your reports difficult to understand.
Kristina, owner of Opalesence Salon, is a good example of how a business can scale when you understand your books and make empowered decisions from a place of confidence.
Meet Salon Owner, Kristina
Kristina owns Opalesence Salon, which has 10+ stylists. She built this business from nothing, leaving the traditional world of salon ownership to create a place where stylists could truly thrive and be taken care of. She has been with me since 2023. She was DIYing her books before, not truly knowing what was going on.
“Before Elli I was keeping track of receipts but had no idea how to categorize any of it yet alone understand my numbers.
When I asked how she felt before I helped with her books, she said: “Unorganized and uninformed about my numbers.”
The Bookkeeping Mix-ups Hiding in Plain Sight
Kristina said I’ve caught mix-ups that she missed. Typically there are mishaps with payment processors such as Vagaro. Sometimes there’s an accidentally duplicated transaction that the Vagaro reports were showing as income, but it didn’t actually happen and hit the bank account. Then there’s tracking cash payments received.
Your Chart of Accounts Should Speak ‘Salon’
Getting a chart of accounts that’s aligned to your business is key to actually understanding your numbers. Things like:
What are you spending on backbar?
On hair color?
On hair extensions you’re purchasing for clients?
Do your employees get a commission?
Getting clarity on questions like these is what makes your reports easy to understand and helps you grow your business!
I didn’t start with a background in salons. When I landed my first salon client, I had to learn the industry from the finance side, including the lingo, so I could build systems that actually made sense to the people using them. (For the record, no. Not all bookkeepers will take the time to do this.)
COGS vs. Supplies: A Category that Changes Your Taxes
Knowing exactly what expense categories to put things in can make all the difference. Putting something as COGS vs. supplies (like back bar expenses) can make all the difference in your tax savings as a salon owner.
Salons with 10+ employees can rack up back bar and color costs pretty quickly. With Kristina updating her inventory for products sold/purchased, I can easily track her COGS so she knows exactly what is going into their services and product sales.
Knowing the Actual Numbers
When I asked Kristina what she never would have known without hiring me, she said: “I would not have known our true profit/loss.”
Knowing her true numbers meant knowing she was making enough to switch to an S corp and be able to provide a stable wage for herself and her employees. It also meant knowing she had created a business that can run while she is on maternity leave, because she has the profit and employees she trusts.
To be clear about my role in planning for maternity leave…
I keep the numbers clean and up to date in her QuickBooks so her accountant could look at the accurate numbers to make the call.
Learning to Read the Reports
After my clients receive their first reports, I always have a call to make sure they know exactly how to read their reports and understand what is going into each category. Kristina now understands her reports each month and can make informed decisions based on her up-to-date numbers.
Oftentimes I ask my clients if they have any big goals, whether that be revenue goals, cutting expenses, etc., and send updates for those goals with their reports. Things like: What percentage of their revenue goal are they at for the year? Have they maintained expenses or increased?
“Receiving Elli’s profit & loss statements at the end of every month has empowered me in my business by showing me where my money is going, which has allowed me to scale in ways I would have been too afraid of before.”
Kristina’s Bookkeeping Before and After
Kristina has become confident in her business and knows what she’s capable of. She doesn’t let anyone tell her she can’t do something and has created an incredible business! She’s always setting big goals and exceeding them all, while having stylists who love working with her and are well taken care of.
When I asked how she felt after I helped with her books, she said: “At ease, confident in my business.”
And when I asked how she’d describe working together: “Easy! You pay attention to every detail and communicate everything with me in simple terms.”
In short:
“Working with Elli has brought me so much peace and increased my confidence in my business! She pays attention to every detail, down to the penny.”
So, is bookkeeping worth it for salon owners?
I can confidently say: Yes, bookkeeping is worth it for salon owners!
If you’re a salon or beauty industry business owner ready to trade the guessing game for clarity,
…and let’s talk about your books.
