Salons & Personal Care
Cash, cards, tips, product sales, and booth rent all moving through the same register. Salon bookkeeping needs separation.
Money Moving in Every Direction
A customer pays cash for a haircut. Another pays by card and adds a $15 tip. A third buys $60 worth of shampoo and conditioner. One of your booth renters hands you a check for the month. All of this happens before noon on a Tuesday.
Salon bookkeeping gets complicated because every transaction can involve multiple categories. Service revenue, product sales, tips that belong to stylists, booth rent that counts as income for you but not as wages. The money comes in fast and from different directions. Keeping it organized while you’re actually running the salon is nearly impossible.
You got into this business because you’re good at what you do. Not because you wanted to reconcile a drawer every night and figure out which tips went to which stylist on which payment method. We handle that part so you can focus on clients.
What We Handle
Salon finances need clear separation between revenue types. Service income tracks separately from product sales. Tips get allocated to the right stylists and reported correctly for tax purposes. If you have booth renters, that rent shows up as income on your side while the contractor tracks their own expenses.
Arkansas charges sales tax on salon services and products. That means tracking, calculating, and filing regularly. Payroll gets tricky when you have employees earning commission plus tips alongside booth renters who pay you but handle their own taxes. We set up QuickBooks to match how your salon actually works so the reports make sense.
Revenue Tracking and Tips
Revenue Tracking and Tips
Service income, product sales, and booth rent separated cleanly. Tips tracked by stylist and payment method. Credit card tips reconciled with payouts. Cash tips recorded for accurate tax reporting. Everything categorized so you see where the money actually comes from.
Payroll and Sales Tax
Payroll and Sales Tax
Commission calculations for stylists. Tip reporting handled correctly on paychecks and tax forms. Sales tax on services and retail products tracked and filed on schedule. 1099s prepared for booth renters at year end. Payroll runs without eating your evenings.
What Goes Wrong
The IRS pays attention to salons because worker classification problems are common. A stylist who sets their own hours, brings their own clients, and pays you rent is a contractor. A stylist you schedule, train, and require to use your products is probably an employee. Calling everyone a contractor because it’s easier creates real liability. Misclassification means back taxes, penalties, and interest when it catches up to you.
Tips cause problems when they’re not tracked properly. Cash tips that don’t get reported. Card tips that aren’t allocated to the right person. At tax time, stylists need accurate records and you need to show you reported correctly as an employer. Sloppy tip tracking creates problems for everyone involved.
Contractor vs Employee
Contractor vs Employee
Treating everyone as a booth renter saves you payroll taxes in the short term. But the IRS has specific rules about who qualifies as a contractor. Getting it wrong means paying back employment taxes plus penalties. This industry gets audited because the problem is so common.
Unreported or Misallocated Tips
Unreported or Misallocated Tips
Tips are taxable income for the people who earn them. If you’re not tracking who earned what, you can’t report it accurately. Stylists end up with incorrect W-2s. You end up with compliance issues. The fix after the fact is always more expensive than getting it right from the start.
What Changes
Clean books show you what’s working. You can see which services bring in the most revenue. You know if product sales are worth the shelf space and inventory costs. If you have multiple stylists, you understand the financial picture for each chair.
Tax time becomes straightforward. Tips are documented. Sales tax has been filed all year. Worker classifications are correct. Your CPA gets organized records instead of a pile of receipts and a vague memory of what happened. You stop worrying about whether you’re doing something wrong because you know you’re not.
Decisions Based on Real Numbers
Decisions Based on Real Numbers
You know which services make money after accounting for time and product costs. Retail inventory tracked so you see what sells and what sits. Booth rent income separated from your own service revenue. Financial statements that help you decide whether to add another chair or cut back on slow services.
Compliance Without the Stress
Compliance Without the Stress
Worker classifications documented and correct. Tips tracked and reported properly throughout the year. Sales tax filed on schedule. Year-end 1099s prepared for booth renters. Tax prep that captures deductions for equipment, supplies, and continuing education. April arrives and you’re ready.
Northwest Arkansas's Dedicated Bookkeeping Partner
The Next Step:
A Quick Conversation
Tell us about your business and where you need help. We'll listen, ask a few questions, and give you a clear plan and honest price.
