A chart of accounts for a spa or medspa
Most spa books are a generic small business chart with treatment revenue in one account. It balances, it files a tax return, and it answers none of the questions the owner actually has.
The structure
REVENUE 4100 Service revenue — treatments 4150 Service revenue — injectables and devices 4200 Membership revenue recognised 4300 Package revenue recognised 4400 Gift card revenue recognised 4500 Retail product sales 4900 Discounts and comps (contra) COST OF SERVICE 5100 Provider compensation — service 5150 Provider compensation — injectors 5200 Payroll taxes and benefits — providers 5300 Backbar and treatment consumables 5350 Injectable product 5360 Injectable waste and expiry 5400 Device consumables 5500 Laundry, disposables, room supplies COST OF RETAIL 5700 Retail product cost 5750 Retail commission 5800 Inventory shrinkage and write-offs LIABILITIES 2400 Deferred revenue — memberships 2410 Deferred revenue — packages 2420 Gift card liability — purchased 2430 Gift card liability — promotional
service from retail, provider cost from everything else, and each deferred balance in its own account. With those in place the margin reports come out of normal posting.
Rules that keep it clean
- Discounts as a contra-revenue account, not netted against price. Netted, you cannot see the drift.
- Backbar separate from retail product, always. They arrive in the same box from the same supplier and belong in different places.
- Provider compensation out of general payroll. Front desk and management are overhead; providers are cost of service.
- One deferred revenue account per obligation type. Memberships, packages and gift cards each reconcile to a different report.
- Promotional gift card value separate from purchased. Different liability, different treatment.
- Location as a dimension, not as duplicate accounts. Two locations should not double the chart.
What sits alongside
| Structure | Carries |
|---|---|
| Chart of accounts | Nature of the revenue or cost |
| Location / class | Which site, for multi-location reporting |
| Booking system | Service type, provider, room, client — the operational detail that should never migrate into the general ledger |
The most common failure is pushing operational detail into the chart — an account per service type, an account per provider. It produces a chart of four hundred accounts that nobody can reconcile. Nature in the chart, detail in the booking system, and a monthly tie between them.
Converting an existing chart
- Pull a full-year trial balance and mark every account: service revenue, retail revenue, deferred, cost of service, cost of retail, overhead.
- Find accounts carrying more than one of those. Those are the ones to split.
- Establish the opening deferred balances from the booking system — usually the largest single piece of work, and the one that makes the rest worthwhile.
- Move at a fiscal year boundary where possible.
- Rerun the prior year under the new structure. Service margin and retail margin should now be separately visible and both should be credible.
Frequently asked
How many accounts should a spa have?
Most single-location spas run comfortably on 60 to 100 accounts. Count grows when service types or providers get their own accounts instead of living in the booking system.
Do we need separate accounts per location?
No. Use the location or class dimension in your accounting system. Duplicating the chart per location makes consolidated reporting painful and grows unmanageable at the third site.
Should tips run through the books?
Card tips must, because they carry payroll tax and reporting obligations. Use a liability account so they pass through rather than touching revenue.
Where do membership fees post at the point of sale?
To the deferred revenue liability, not to revenue. The monthly entry moves the earned portion into revenue. That single change is the difference between books that describe the business and books that describe the bank account.
Related
Memberships and packages: what you have actually earned
Why membership and package money is a liability rather than revenue, how to move it as it is delivered, and what happens when nobody does.
Read →Getting the booking system to agree with the books
Boulevard, Zenoti, Mindbody, Vagaro and the rest: what they hand off to accounting, what they do not, and the reconciliation that has to happen either way.
Read →The monthly close for a spa or medspa
A close checklist built around deferred revenue, inventory and utilisation, and the small set of numbers worth looking at when it lands.
Read →