Bookkeeping and Accounting for Barbershops

As a barbershop owner, you have the ability to claim a variety of expenses for tax deductions. Some of these expenses include:

• Supplies like razors, scissors, combs, chairs, towel warmers, and hair products
• Rent or mortgage interest if you own the premises
• Utilities such as electricity, water, and phone services
• Marketing and advertising costs
• Services like cleaning, maintenance, and salon software
• Insurance and licenses
• Employee wages and benefits
• Continuing education and training
• Depreciation on equipment

It's important to note that this is not an exhaustive list, so it may be beneficial to seek advice from an expert in accounting to guide you about what can and cannot be claimed. Always remember to keep excellent records of all of your expenses for easier tax time documentation.

Managing cash flow in a barbershop with a high volume of low-cost transactions can be an ongoing challenge but can be made easier with some tried-and-true strategies. First, make use of a digital financial management system or virtual bookkeeping service that can handle the volume of transactions and give you real-time financial visibility. This helps in tracking every transaction accurately and enables you to see where the money is going and coming from instantly. Secondly, consider implementing cashless payments for convenience and increased financial accuracy. Lastly, engage a proficient bookkeeper who understands the unique dynamics of your business and can provide appropriate financial advice and solutions.

The best way to handle payroll for your barbershop staff, especially when it involves tips, is to use a reliable payroll system. This payroll system should be able to factor in hourly wages, commissions, and tips that your staff receives. It is also critical to ensure that the system can accurately report these amounts to the Internal Revenue Service (IRS).

Tip income is taxable, therefore, your employees must report tip income on their tax returns. It's your responsibility as the employer to make sure that taxes are properly withheld from your employees' paychecks. You can either account for the tips in your payroll system or have your employees report their tips to you, for which you will then calculate the necessary withholdings.

Moreover, since payroll involves many complicated processes, you can consider outsourcing to a payroll service or hiring a bookkeeper. They can help with tax withholding calculations, paycheck processing, tax form preparation and other payroll-related tasks.

If you're unsure about how to handle payroll for your barbershop staff, it's best to seek professional advice. A bookkeeper or accountant can guide you through the process, ensuring that you're in compliance with all the necessary regulations and requirements.

Nope! All bookkeeping is completed in-house.

Your bookkeeper will be your main point of contact, but at times you might hear from another member of your team. This is usually when your bookkeeper goes on vacation, is sick, or otherwise unavailable.

We handle the bookkeeping for you but sometimes we’ll need your input, especially at year-end. On average, expect to spend 15 minutes each month answering questions for your bookkeeper, or uploading supporting docs.