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Complete Guide to Bookkeeping For Hair Stylists

self employed hairdresser bookkeeping

If you wear a uniform whilst you are working, then you are entitled to claim back the cost of this as a business expense. Importantly, given the new working environment post Covid-19, you can also claim back the cost of any PPE or other protective items you need to do your job. Obviously, you’ll want to keep your insurance documents in a safe place should you need them, but they’ll also come in handy if you need to prove your expenses at any point in the future. This means you need to include any other relevant information about your income. For example, if you were working as a PAYE employee in the same year that you became a self-employed hairdresser, you will need to provide information on this. You should be able to find all of this relevant information in your P45 and P11D which your employer should have given you when you left.

Once you’re set up and working as a self-employed hairdresser, it’s really important that you keep up to date with your bookkeeping. The amount of tax that you will owe at the end of the financial year will be based on your profits (which is your earnings minus your outgoings). Think about all the methods available and choose the simple and suitable ones. Come up with a payment policy and communicate it with your clients. Have several payment methods such as debit cards, money transfers, and cash payments to offer every customer convenience.

Record All Income and Business Expenses

Filing taxes isn’t an easy task and it’s important to get them right! We’d like to help you find your way through this maze; we spell it out in plain ol’ English and remind you when it’s time to pay. It may seem a pain, but you should keep a copy of each invoice you send to your clients as well as all your receipts for both incoming and outgoing payments.

  • Proper bookkeeping is key to a successful salon; record your services, tips, sales and expenses totals.
  • The amount of tax that you will owe at the end of the financial year will be based on your profits (which is your earnings minus your outgoings).
  • With detailed information, you can find out how much you need to spend on supplies and where you can cut down.
  • We’d like to help you find your way through this maze; we spell it out in plain ol’ English and remind you when it’s time to pay.
  • We also offer a whole host of stationery items that’ll on track and well organised.
  • This statement (also called an income statement) shows your total revenue, minus your expenses, to show how much money you made or lost in a specific time period.
  • Keep your insurance documents in a safe place in case you need them.

I put together this tax guide for self-employed hairdressers because as a Chartered Accountant in my previous life, I know how confusing business registration and taxes can be when you work for yourself. It’s a specialized computer program that’s designed as a flexible, easy-to-use accounting solution. As a result, the program has become commonplace among small businesses and only continues to get more popular. If you’re a self-employed hairdresser, you’ll know self employed hairdresser bookkeeping how much time financial tasks require, adding stress and an extra workload to the end of each busy day. Self-employment is common in the hairdressing industry, usually with the individual hiring a chair in a salon and bringing their own independent clients into the business. The regulation means that the business will need to deduct at-source taxes from the hairdresser’s payslip, including tax and National Insurance, processing pay through their PAYE system.

Your invoices and personal paperwork

Accounting refers to analyzing the business financial records to make critical business decisions, while bookkeeping refers to recording every transaction in a small business or rental booth. As a business owner, you are probably aware that some parties may be interested in knowing your financial conditions. If you don’t provide these details, it could cost you the relationship you have formed with them. Having well organized financial records helps you present the figures to interested parties when the need arises. Unfortunately, some business owners ignore it and end up suffering from financial turmoil. Here are some of the reasons why self employed hairdresser bookkeeping is essential.

  • In case a financial problem arises, you can retrieve your documents from the system for backup.
  • For the rest of this guide I’ll assume that you are registered as self-employed.
  • Value Added Tax (known as ‘VAT’) is a tax added to the price most goods and services consumers buy.
  • The quickest and easiest way to register to work for yourself with HMRC is to apply to be self-employed.

You have freedom, you get to choose your clients, and most of all you get to do what you love for a living. There’s a reason why hairdressing ranks highly in the index of happiest professions. But it’s important not to forget about the more ‘mundane’ side of things. To make your life a little easier when it comes to these tasks Salons Direct has created this guide to expenses and bookkeeping for hairdressers. At the other end of the spectrum to salon-based hairdressers, there are those  self-employed hairdressers who choose to spend their days travelling from client to client.

QuickBooks Set-up and Clean-up for Hair Salon

We also have in-depth knowledge of the complicated federal, state and sales tax laws. We offer tax minimization strategies and structures that have been proven and used successfully with other clients. Our restaurant technology consulting insights can make a significant difference in improving operating margins.

self employed hairdresser bookkeeping

With the Countingup app, you can get instant insights into your profit and loss, as well as the ability to create and send invoices in instants and a handy receipt capture tool. The app’s useful features mean that you can spend less time focusing on time-consuming financial admin and focus on what you do best. In terms of deciding how to record this information, there are computer programs on the market that can help you make better business decisions according to your business growth. QuickBooks is still one of the most popular on the market, with their Self Employed program open to those independent workers.

Tax Guide for Self-Employed Hairdressers

Suitable for all self employed hairdressers, beauticians, hair salons, barber shops, tattoo studios, tattoo artists. And if you love these ideas or have some other ideas that you’ve used in the past to promote your salon business, why not share it with the Zolmi community in the comment section below. A lot of things happen in a small business every day, and information can get quickly piled up. Another thing you should be careful about is keeping all receipts. If you bought an item for your business or rental booth and want to return it to the seller for various reasons, the seller will require you to represent a receipt to prove that you purchased the item.

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Every business is unique, and there’s no single system that’s right for everyone. Here at Better Bookkeepers, we apply our extensive experience in bookkeeping in San Jose to create custom solutions for each client. Do you have an existing bookkeeping system that has been making errors or takes more time than you’d like? In this case, hiring Better Bookkeepers for a one-time review is your solution. We can perform an exhaustive review of your books and documentation procedures, identify problems, and propose lasting solutions. Furthermore, we can design a new system that’s specialized to the unique needs and priorities of your business.

Expenses or expenditures refer to the total amount of money a business has spent running its operations e.g. rent, utility bills among others. Starting with the right foot is the only way to go when it comes to taxes. Accounting analyses your bookkeeping data to show you how your business is doing financially.

We’ve listed a few below to ensure that you can talk the talk when it comes to effective bookkeeping. As a small business owner, it can be tough to balance seeing your clients and managing the administration tasks necessary to keep your business running smoothly. Income, which can also be called revenue, is the money collected from offering a service, like hair styling. Accounting is analyzing your business financial records to make better business decisions.

The best way of tracking all of this financial information is to make bookkeeping a habit. Schedule it into your diary on a regular basis so that you don’t fall behind. You can do this manually using a spreadsheet, or if you prefer there are a whole host of different apps and softwares available that take care of some of the time consuming manual processes. Here at Salons Direct, we offer Simple MTD VAT Filer software which can help you get your tax right and stay on top of everything. We also offer a whole host of stationery items that’ll on track and well organised. Countingup is the perfect current account solution for self-employed hairdressers.

  • Give Better Bookkeepers a call, and we’ll answer all of your QuickBooks questions.
  • You can also claim back the cost of any PPE or other protective items you need to do your job.
  • With the cash method, transactions are recorded after payments have been received after selling goods or services.
  • Busy periods and a shortage of qualified staff may mean that these businesses look to find self-employed hairdressers to meet demand.