Last week, I had quite a few people join my Facebook group, Spa Business Mastery. Turns out someone recommended to members in a different group that if they needed answers regarding spa specific financials, specifically tracking expenses, this is the group to be in. Tax season is here and I know you’re stressing out; digging through your wallet for wayward receipts and office drawers for invoices, in an attempt to get your reports & expenses bundled up and to your accountant for ready tax time.
Now we didn't go to school for bookkeeping or accounting, so right off the bat I would like to suggest to you that if you are currently doing your own bookkeeping…stop it. Unless you are very good at this on your own and you know what you're doing, it is not worth your time trying to figure out this part of your business. Quite frankly, bookkeeping a big headache for most of us, so do yourself a huge favour and source it out.
I have two practical tactics to get a handle on your spa expenses.
Download a free expense spreadsheet
Even if you have somebody doing your bookkeeping for you, you still need to be tracking your expenses to feel the pulse of your business and course correct as needed. If you’re not submitting your bookkeeping monthly (but I hope you do) there are tons of free downloads out there on cash flow forecasting and expense reports. It only takes a quick Google search for “free monthly business expense spreadsheet” to find a simple excel download.
Guaranteed, with all of these basic templates you will need to adjust your line items. What I mean by line items are things like rent, utilities, bank fees, etc. Free templates may have line items for meals/entertainment and other things that aren’t applicable to your spa business. All you have to do is edit or delete those line items for your own specific business.
What if you’re in your 1st year of business and don’t know what to expect in the way of expenses? You can always add items as they come up each month, but most spa owners to pay have the same expenses: rent, telephone, utilities, marketing (menus, website, FB boost posts), merchant fees, credit card interest, business coaching ;). And if you have a team, your largest expenses will be payroll. Just make sure you are tracking all the money that’s leaving your bank account.
Shoeboxed – The virtual receipt collector
One of the aspects of tracking expenses I’ve often struggled with is all my little expenses. You know the ones I'm talking about - you pick up a birthday card for a staff member and you just shove the receipt in your wallet…and then it never makes it to your bookkeeper or your accountant at the end of the month/year.
There is a really cool app called Shoeboxed. With this app, you take a picture of your receipt and it puts it into your Shoeboxed account. At any time, you can log into your account and download your receipt into a CSV file and send to your bookkeeper. It's a really easy way of tracking all those little expenses that somehow get lost (and forgotten) but can add up to substantial cost at the end of the year that probably accounting for. Give that app a look and maybe that's something that you want to add to your daily habits when you're out purchasing.
Bonus - Flag your emails
Another place that sometimes can get you into trouble with expenses are those invoices that come in through email, for example, monthly online subscriptions. We get a ton of email every day and it's really easy for information to get lost in the feed. Personally, I flag the email containing the invoice (with a specific color for easy tracking), then at the end of the month, pull up all those flagged emails and print off my invoices. Or, you could simply print off the invoice as it comes in. Either way, do whatever you find is easiest but gets the job done.
I hope these two tactics for tracking expenses makes your admin time a little bit easier. I know you don’t often feel like a businessperson, but it sure helps your spa business outcomes when you act like one.
If you are an esthetician or spa owner and would like to join Spa Business Mastery group on Facebook, feel free to join! Please have your profession or position clearly stated on your FB profile. I don't let just anyone in this group, just spa owners and wannabes!