An accountancy practice for a beautician – find out the main benefits of such a partnership
The beauty industry combines many market segments – these include hairdressing, cosmetology and aesthetic medicine. As the beauty sector grows stronger every year, more and more people choose to leave their full-time jobs to set up their own business. What entrepreneurs need to know if they decide to take this career path
In this article you will find out about the costs of running a beauty salon, how to manage your finances and the biggest benefits of bookkeeping for small beauty businesses. We’ll also discuss the features of an effective accounting software for beauticians to help you take your first steps in the industry. Enjoy your reading.
Financial management in a beauty salon – what do you need to keep in mind?
Budgeting policy in the beauty industry requires careful analysis of both the cost of doing business and potential revenue. Every hairdresser or beauty salon needs to monitor current expenses, control cash balances and forecast future revenue. However, this task is not so easy – especially for those who prefer to focus on providing a quality service rather than accounting formalities.
In this area, cooperation with a beautician’s accountancy practice, which not only provides a full financial service but also professional advice on cost optimisation, can prove to be an invaluable support. Expert accountants are well versed in tax regulations and know how to legally turn them to the entrepreneur’s advantage. What are the main elements of the financial management of a company in the beauty industry that are included in the tax return?
Costs of running a beauty salon
When opening a beauty salon, there are various operating costs to consider – these expenses can range from recurring to occasional or one-off costs. The costs of running a beauty salon in the UK include:
- rental of premises – depending on the location chosen and the area of the premises, monthly rental fees can range from £500 per month in the suburbs and smaller towns to £2,500 or more in central London;
- purchase of equipment and cosmetics – One of the main expenses is also the purchase of necessary equipment, such as cosmetic chairs, hair washing stations, mirrors, lamps and cosmetic equipment. The cost of such equipment is around £5-15,000;
- insurance – annual insurance costs for a beauty salon range from £500 to £2,000;
- utility charges – average expenses for water, electricity, air conditioning and heating in a business premises in the UK are around £1,100 per year;
- employee wages – average salary for an employee in a beauty salon according to uk.jobted is £23,740 gross per annum;
- marketing expenditure – the costs allocated to marketing can vary greatly depending on the strategy chosen and the scope of marketing activities, but are often fundamental to the success of a brand in the marketplace.
Remember that these are only estimated costs that may not be reflected in the case of your business – however, each of these expenses can be skilfully included in the cost of receiving income, so that income tax is not as painful for you. Effective accounting software for beauticians allows you to keep track of your expenses and income, which is essential for maintaining a healthy financial balance sheet.
Taxes for the beauty salon
One of the key financial aspects of running a business is taxation – for beauty salons in the UK, this primarily includes:
- Income Tax,
- National Insurance,
- Business Rate,
- VAT.
VAT accounting for beauticians covers salons with an annual turnover in excess of £90,000 per year. In this situation, it is necessary to register the business with HMRC. In the vast majority of cases, the VAT rate will be 20%.
Various exceptions and reliefs are included in UK law so that you can reduce some of your tax costs. The experienced accountancy practitioners at Essence Accounting can help you optimise your business finances – with our help you can avoid problems with HMRC and bolster your salon budget at the same time.
Accounting services for the beauty industry – why should you outsource them?
Why use a beauty accountancy practice? A professional accountancy practice, such as Essence Accounting, is familiar with the beauty industry and is able to tailor its services to meet the individual needs of its clients. The benefits of working with an accountancy practice include:
- time savings – thanks to professional accounting services, entrepreneurs can devote their time to developing their business without worrying about tax formalities;
- tax optimisation – the accounting practice will help you find legal ways to minimise your tax bills;
- financial security – a professional accounting service ensures that all your accounts comply with the law and you have access to a complete overview of your company’s finances.
A comprehensive accounting service for beauticians is not only a convenience, but also a way to effectively manage the company’s finances.
We provide comprehensive bookkeeping for beauty salons in the UK – check out our offer
Essence Accounting is an accountancy practice that offers a comprehensive accounting service for the beauty industry and beyond. We help you with financial management, bookkeeping, payroll, budgeting and tax planning – from now on you can focus on what you do best, which is running your beauty salon.
Trust the professionals and contact our advisors – accounting for a beauty salon has never been so easy.
