There’s a really good chance that bookkeeping was the last thing on your mind when you decided on a career as a stylist. Right? But let’s face it. Your business could go downhill fast (think about a very slippery slope) if you’re not doing a good job of managing your funds.
If you’re renting a booth space inside a salon, you’re not likely in a position to hire your own bookkeeper or accountant. So, it’s time for a few lessons on getting better at bookkeeping skills — from tracking your expenses to staying on top of the revenue for the services and products you’re selling on a day-to-day basis.
Read on for 4 steps to polish up the bookkeeper in you:
- Understand the terms. You probably already are familiar with common bookkeeping terms, but it doesn’t hurt to have a refresher. Keep in mind that you’re constantly tracking expenses (anything you’re spending to operate your business, including scissors, hair products, and booth rent); revenue (the money you’re making when selling products and services); costs of goods sold (money spent on the products that you will turn around to sell to your clients); net profit (the actual profit you make after you account for all costs and expenses); loss (the excess of expenses over your revenue); and inventory (an accounting of products you will sell to your clients).
- Maintain a ledger. You can use an old-fashioned book ledger that you can find at an office supply store, or you can select a ledger program that you can use from your computer. This is where you will keep track of all your expenses, revenue and transactions — from purchasing products to selling them.
- File away documents and receipts. Keep track of any receipts or other documents that may come in handy when you’re calculating your profits and losses. Find a system that works for you. It could be as simple as an accordion file folder or a portable plastic filing system.
- Maintain accurate records. If you’re not doing this already, make sure you’re regularly entering into your ledger any of your expenses as well as your sales. Keep track of each client’s information, as well as the services that you’re providing for each and the cost. Keep it up. It will eventually become a habit. You can calculate where you are at the end of each month to determine whether you are maintaining a net profit — or if you’re at risk for a loss. For example, you may be purchasing too much inventory and risk the possibility of not being able to sell it. Make any adjustments, if necessary.
Of course, these are just the basics. However, with regular practice, you’ll be able to maintain an overview of your financial status to make insightful decisions on how to grow your business.
Use Stylie to help you maintain accurate records for your business. The online scheduling and point-of-sale tool for independent beauty professionals makes the job easier. Request a free 30-day trial of Stylie to see how it can help you build your business throughout the year.
-Easy for you, Easy to love-