Bookkeeping for Medical Spa Business

Mar 11

Introduction

Welcome to the wonderful world of bookkeeping! You’ve started your own medical spa business, and have been taking care of your clients. Now that you’re doing business, it’s time to start tracking all your financial transactions to see how well you are doing. This is where we come in — we’ll give you a quick overview of what bookkeeping means and what kind of information you should be gathering so that you can see whether or not your business is making money.

WHY IS BOOKKEEPING IMPORTANT?

Knowing where your money is going and whether or not you're making money is crucial for any business, especially one as small as yours. Bookkeeping helps you do that by keeping track of income and expenses. It's also important to know if you're in the red or black if it's important for you to stay out of debt and maintain a healthy cash flow.

HOW TO SET UP A BOOKKEEPING SYSTEM THAT WORKS FOR YOUR MEDSPA?

Keep track of financial transactions.
You need to keep track of your business’s finances. This is important because you want to know your expenses and income, so that you can make informed decisions about how much money you have available for future investments in your business. Financial records will also help you with tax preparation at the end of the year.
Set up a bookkeeping system that works for your medical spa.

To set up a bookkeeping system that works for your medical spa, there are some things you should consider:

What kind of software do I use?
Do I use an online program or do I want something more traditional like Quicken or Quickbooks?
How much does it cost?

The truth is there is no right answer here because every person has their preference when it comes to software programs but before making this decision think about what type of documentation needs tracking most often from day-to-day operations such as invoicing clients, payroll taxes/liabilities etc.

You may find yourself using different types depending on what type activity takes place within those categories like online billing versus payroll reporting needs all tracked separately in separate modules within one program.

INCOME STATEMENT (PROFIT & LOSS)

The income statement is a financial summary of your business’s revenue and expenses. It shows the net profit of your business for a specific period.

Profit & loss statements are typically prepared at least once per month, but they can also be prepared quarterly or annually.

How to prepare an income statement:

To begin, you will need to gather all of your financial data from the previous month and put it into Excel or another spreadsheet program. If this is not possible, you may have to wait until the end of your first month in business before preparing the statement so that all data is available for review.

Next, organize the information into columns with headers such as “Income” (or “Revenue”), “Expenses” and “Net Profit/Loss” (or “Net Income”). You can also add additional columns if desired—for example adding one column where you total each row up gets an accurate count without needing to manually sum every cell individually!

Now that everything has been entered into rows on one page we want each row representing a single activity/transaction which means we need to make sure that each transaction matches exactly with its own unique entry so let's go back through our list again making sure everything matches up properly by double-checking each entry against its corresponding source document (e-mail receipt etc.). This step might seem tedious but remember: accuracy counts here!

BALANCE SHEET

Balance sheets are a snapshot of a company's financial condition. They show the assets and liabilities at a specific point in time, as well as their relationship to each other. The balance sheet is usually prepared using double-entry recording, so every transaction affects two accounts on the balance sheet.

The three main categories that make up a balance sheet are:

Assets - things owned by the company; e.g., cash, equipment and inventory
Liabilities - claims against assets owned by others; e.g., loans from banks or customers who have not paid invoices yet

CASH FLOW STATEMENT

Cash flow is the lifeblood of your business. You need to know how much cash you have at any given time, and how much money is coming in and going out of your business. A cash flow statement gives you a snapshot of your business’s financial health. It shows how much cash is coming in, what expenses are being paid out, and if there’s enough left over for any profit (or loss).

If you have a solid grasp on your own finances and can accurately forecast future events, then by all means use the cash-based accounting method. But if not—and especially if this is your first time keeping books—you should consider using accrual accounting instead.

"Bookkeeping is the foundation of your business success. When you’re keeping track of all your financial transactions, you’ll be able to see the numbers that determine if you’re making money or losing money."

Bookkeeping is the foundation of your business success. When you’re keeping track of all your financial transactions, you’ll be able to see the numbers that determine if you’re making money or losing money.

The following sections will help you set up a bookkeeping system that works for your business. You can use either QuickBooks Online (QBO) or QuickBooks Desktop (QB) to manage your books as long as both versions are synced up with each other.

Conclusion

I hope this post has helped you understand why bookkeeping is important for your business. It can be a complicated process at first, but once you get into it, it will become clear how helpful this information is for making decisions about your company's future direction. If you want to learn more details about how to set up a bookkeeping system that works for your medical spa, let me know in the comments below!