The Beauty & Personal Care Business Bookkeeping Guide: Simplifying Your Finances
- Team Book Tech
- Aug 1
- 5 min read
Updated: Sep 6
Running a beauty business—whether it’s a salon or spa or freelance—is about far more than just being able to cut hair, give a massage, or create the perfect cat eye. Tracking income, expenditures, taxes and investments are all critical to the health and longevity of your business. But bookkeeping itself can feel overwhelming and boring to many beauty pros. The good part is that bookkeeping can be easy and stress-free with the right approach and tools.
In our guide, we’ll break down the bare minimum in bookkeeping basic for beauty businesses and offer real world best practices that will keep you organized, stay smart, and simplify finances in your business.
Step 1: Keep Personal and Business Finances Separate
As a beauty business owner, one of the first things you should do is to distinguish your business expenses from personal costs. It’s also a whole lot easier to do bookkeeping when you’ve got most of your transactions taken care of already, which can save you time (and relieve some stress) come tax time.
Why is this important for beauty & personal Care bookkeeping?
Makes tax filing easier: When you have separate accounts, it’s easy to know which expenses are truly business-related and which are your personal expenses, making it easier to file taxes.
A professional look: A business account can make your business look more professional and build trust with clients and vendors.
Financial transparency: With separate finances, you can really see how well your business is doing related to cash flow, profitability and expenses.
What to do:
Open up another business checking account and credit card for your beauty business.
Keep accurate accounting of all your business activity in software or spreadsheets.
Step 2: Document All Income Sources
As a beauty pro, you’re probably on multiple income streams. Regardless of whether you are giving haircuts, facials, makeup, or selling products, you want to be able to keep track of all which you are making.
Typical income streams in the beauty business:
Service fees: Revenues generated from beauty treatments such as haircuts, facials and manicures.
Product sales: Revenue from the sale of beauty products like skin-care products, shampoos or makeup.
Tips: Clients’ tips from beauty services.
Memberships and packages: Revenue from clients who pay in advance for services or sign up for membership plans.
Special events: Earnings for hosting or attending beauty workshops, bridal parties or any other beauty events.
Pro tip: Use accounting software or a spreadsheet to classify and monitor your money from various sources. This will help you track how each aspect of your business is doing and enlighten you to new growth opportunities.
Step 3: Keep Track of Expenses
Being on top of your expenses is as crucial as being on top of your income. Good bookkeeping will allow you to monitor that you’re spending wisely and not going over budget by keeping receipts of all your business expenses.
Typical operating costs for a beauty business are:
Product inventory: The value of beauty products you sell or use to perform services (shampoos, conditioners, skin products, and the like).
Tools: The buying of beauty items like hair shears, blow-dryers, makeup brushes, facial equipment, and more.
Salon rent: If you rent commercial space, this will likely be your biggest expense.
Utilities: Electricity, water, heating, internet for your business premises.
Marketing: Expenses related to promoting your offerings, such as social media ads, flyers or website hosting.
Employee wages: If you employ staff, you also will have to track their wages, sales commissions and benefits.
Tip: Maintain copies of all of your receipts, invoices and payment records. Take pictures of paper receipts with an app and digitally store them to reduce chances of losing important papers.
Step 4: Use Bookkeeping Software
Yes, it is possible to have manual bookkeeping, such as with spreadsheets or paper records, but this can be very time-consuming and have the potential for errors. For an easier life, it is worth looking at bookkeeping software.
Trending beauty salon accounting software:
Tip: Pick the bookkeeping software that will serve your company’s copy the best, particularly anywhere you can automate transactions by integrating with your checking account so you don’t have to manually plug them in.
Step 5: Stay on Top of Taxes
As a beauty business owner, it is necessary that you stay on top of your tax as much as possible. Tax laws can differ from place to place, but there are some general guidelines that apply to most beauty businesses.
Key taxes to know about:
Sales tax: Beauty services and products are subject to sales tax in most states or countries. Be sure to understand whether your services need to have taxes collected, and how to charge those taxes appropriately.
Income tax: As a business owner, you’ll need to report all of your income (including your service fee, retail sales and tips) and pay related income tax.
Self-employment tax: If you are running a sole proprietorship or freelance business, you will be required to pay self-employment tax, which goes toward Social Security and Medicare.
Tip: Save a percentage of your income during the year to pay your taxes so you’re not trying to generate the funds when tax season rolls around.
Step 6: Always Reevaluate Your Financial Situation
You also need to be checking in with your financial status on a regular basis. Do not wait until the end of the year to see your numbers. Instead, go through your income and your expenses every month and adjust your strategy if you need to.
What to review:
Cash flow: Are you burning through more money than you’re bringing in? If so, see how you can reduce your expenses or bring in more money.
Profit margins: Verify that you’re priced for profit on services and products.
Financial goals: Are you set to hit your financial goals, whether it be saving for new equipment or growing your business?
Tip: Pick a day each month to check on your finances and adjust. When you are proactive, you keep ahead of any financial problems.
Step 7: Plan for the Future
Now that you have your bookkeeping system established, it’s time to consider for the future of your beauty business. How can you grow? What are additional things you can do to serve someone else? Are there any ways that would let you earn more and your financial status changes?
Financial goals to consider:
Reinvestment: Setting money aside to reinvest back into your business, whether with new equipment or another staff member or two.
Emergency fund: A fund that sets money aside for the sudden or slowing of work.
Retirement savings: Make sure you’re planning ahead for retirement by establishing retirement savings, especially as a self-employed business owner.
Conclusion: Keep your beauty industry finance simple
Learning bookkeeping can feel overwhelming at first, but it doesn’t have to be. By establishing a sound financial structure, monitoring your revenue and spending, and with the help of the proper tools, you can gain a better handle of your finances and position your beauty business for sustained success. Utilizing those tips will help make it easier.
By diligently keeping up-to-date on your finances, e.g., taxes, and preparing for the future, you’ll also be able to dedicate your time and attention to what you do best: creating beautiful experiences for your clients.
Book Tech's Beauty & Personal Care Bookkeeping helps salon owners, spa managers, beauty professionals, and personal care brands stay financially organized, compliant, and focused on growing — without the stress of doing it all alone.
