Why good bookkeeping is crucial
Bookkeeping is a necessary evil for many salon owners. Yet it is one of the most important pillars of a successful salon business. Without insight into your finances you cannot make good decisions about investments, pricing or growth.
Moreover, as an entrepreneur you are legally required to maintain an administration. The tax authorities can check your bookkeeping up to seven years back. A messy administration can lead to surcharges, fines and even criminal prosecution.
The good news: with the right tools and a bit of discipline, bookkeeping doesn’t need to be difficult or time-consuming. Start with a good structure and maintain it consistently.
Bookkeeping tips specifically for salons
The beauty industry has some specific points of attention when it comes to bookkeeping. Here are the most important tips for salon owners:
- Completely separate business and personal finances with a separate business account
- Record every transaction immediately — both cash and card payments
- Track your product stock as part of your bookkeeping
- Keep all receipts and invoices digitally (at least 7 years)
- Distinguish between the VAT rate for services and the one for products
- Track staff costs separately per employee
- Create a monthly profit and loss overview
Key figures to review every month
Many salon owners are excellent at their craft but rarely look at their numbers. Without clear insight into revenue, costs and margins you cannot make good decisions about growth and investments. Set a fixed moment each month to review these key figures:
- Revenue per day, week and month
- Average revenue per client
- Product costs as a percentage of revenue
- Staff costs as a percentage of revenue
- Occupancy rate of your calendar
- Profit margin per service
Tax benefits for salon owners
As a salon owner you can make use of various tax deductions that reduce your tax burden. It would be a shame not to take advantage of these, as they can save you thousands of euros per year.
The small-scale investment allowance is interesting if you invest in equipment or fit-out. Investments between €2,801 and €387,580 qualify. Think of new salon chairs, wash stations or a renovation.
Additionally, you may deduct costs for business use of your car, phone, training and trade literature. If you work from home, you can claim part of your housing costs as business expenses. Always discuss this with your accountant to do everything correctly.
Salon software as a bookkeeping tool
Although salon software does not replace full bookkeeping, it can take away a large part of the administrative burden. In MyWest every receipt from the till ends up in Finances automatically, with payment method, VAT per rate and tip. There you see your revenue, costs, profit and VAT per period, and you download a PDF report for your accountant.
What does not arrive by itself are your expenses and fixed costs: you enter those yourself. MyWest is not an accounting program and does not file a return for you; for Dutch salons it calculates each quarter which VAT amounts you can copy into the tax authority’s portal.
Tip: schedule a fixed day each month for your administration. Export your report from MyWest, check your bank statements and send everything to your accountant. This prevents work from piling up.