Accounting 101: Groomer’s Revenue and Expenses
What are the unique challenges of managing the groomers’ balance sheet?
If you own a dog grooming business, you often have to wear many hats, acting as a people manager, a marketer, and a dog whisperer. And administrative tasks, such as accounting, can get in the way of you giving pups the best care. Plus, as your dog grooming business grows and you start adding new lines of business, such as selling products or adding services, the accounting headaches can really multiply. Additionally, dog grooming can be a seasonal business: you may have tons of time to catch up on billing and accounting in the winter but you get slammed in the summer, so some invoices can slip through the cracks.
How can grooming businesses address these accounting challenges?
If the thought of balancing your checkbook has you sweating, not to fear. We’ll show you how you can hire a qualified accountant who is familiar with your business model, or use accounting software that is customized for pet businesses. Your small business is your baby, and it has its own intricacies and idiosyncrasies. That’s why, if you choose the accountant route, it’s important to work with someone who has experience in your industry. In addition to bookkeeping, they can help you with a dog grooming business plan, and be a supportive ear when you have questions. Dog grooming software can act as a great supplement to or replacement for an accountant, as some software, like PetExec, can do much of the accounting heavy lifting, like reporting, revenue and expense tracking, and managing inventory. It can even track your vendor names and relationships, so you can ensure only the best partners are delivering you quality products on time.
How can groomers track and manage inventory effectively?
Groomers can track and manage inventory effectively by categorizing inventory, assigning barcodes, centralizing their storage area, monitoring expiration dates, reordering items in a timely manner, and running reports on usage patterns. If your inventory is in a central place and all your items from leashes to brushes are in distinct areas with distinct barcodes, it is much easier to go through your supply and identify which items need to be reordered, which are expiring, and which items to discontinue selling because of their low sales. A lot of this work can be automated with the help of dog grooming software, like PetExec. PetExec’s grooming and dog daycare software can help you on the entire lifecycle of selling products, from inputting them into the system, to capturing payments, to keeping track of inventory, to cataloging vendor information, to reporting.
How do groomers properly account for employees’, contractors’ tips and payroll?
Dog groomers often have varied pay rates and schedules, seeing a furry– we mean, a flurry – of clients at different times on different days. Keeping track of these contractors' times is essential to keeping your dog grooming ship afloat. After establishing a payroll schedule, groomers can utilize a time clock module to calculate payroll hours and monitor tips. They should file payroll taxes and provide W2s to employees. If you’ve never dealt with payroll before and are concerned about taxes and the IRS (and who wouldn’t be?) you might want to hire a qualified accountant in conjunction with a dog grooming software. PetExec’s software allows you to manage employee schedules, have employees clock in and out of their shifts, have visibility of tips, run payroll reports, and much more.
What are the main accounting challenges faced by groomers?
Accounting can often seem like a many-headed monster, with new problems popping up as soon as you get rid of one. Groomers often struggle with tracking revenue and expenses, managing inventory, complying with regulations, and dealing with insurance claims. First, tracking revenue for all your sources of income, from grooming appointments to pet product sales, and how that income gets to you via cash or credit card, requires attention to detail. On the other side of that balance sheet is cataloging expenses for rent, insurance, marketing costs, and employee salaries. Recording these expenses will help you come tax time, and will help you separate your dog grooming business profit from your dog grooming business expenses, but is difficult to do manually or without some form of billing software. You’ll also have to juggle inventory management: checking what’s low in stock and reordering it, or discarding products if you sell perishable items such as fresh dog food. Like any business, it’s also important to comply with regulations. These include business licensing, zoning regulations, employee regulations, and of course, animal welfare and care standards. Many of these regulations may be difficult to understand if you don’t have financial or legal training. Lastly, you’ll have to account for insurance claims by purchasing insurance that protects you from liability and risks, like worker’s compensation insurance. Purchasing plans might be a little confusing as many different companies offer insurance at different prices.
What are the solutions to the challenges of accounting for pet groomers?
If all of the above subjects and tasks are making your head spin, there are people and software options that can help. A qualified accountant can make sure you’re complying with legal matters, balance your checkbook, and raise issues to you as they come up so you can tackle them together. Since dog grooming is a business with its own rules and regulations, it’s important to find someone who has worked in the pet industry before, or better yet, has worked with groomers before. Alternatively, if you would like a potentially more cost-effective solution, or have someone handling the finances at your business already, dog groomer accounting software can be the perfect replacement for or complement to working with an accountant.
Are there any specific accounting software solutions for groomers?
While you can get accounting software anywhere, there are options that work specifically with pet groomers and dog daycare owners, like PetExec. In addition to all of their capabilities listed above, PetExec even has an export feature with QuickBooks, so you won’t have to learn another accounting system if you’re already used to QuickBooks. PetExec has other handy integrations that will save you time and energy, like credit card merchant processing, and a helpful credit card processing device for point of sale/tips. PetExec is also infinitely customizable, whether you run a tiny grooming business or a large chain of businesses, so you can be confident that your unique needs are being tailored to and customized. Another huge benefit of working with PetExec is becoming one of their Packmates: a program that gives you exclusive discounts with partners, access to customer support, and even a community where you can connect and share your dog grooming experiences.
How can groomers ensure tax compliance?
In order to ensure tax compliance, groomers can learn about tax obligations, determine their business structure, register for an EIN, file payroll and quarterly taxes, and record sales taxes. You’ll have to familiarize yourself with (or have an accountant educate you about) city, state, and national tax laws like income, sales, and employment taxes. You’ll also have to decide whether your business is an LLC, sole proprietorship, corporation, or partnership – each of these comes with various tax advantages and disadvantages, and many of them will call for you to register for an EIN. And you’ll have to remit taxes from payroll (including Social Security, Medicare, and Unemployment) and sales, if your state has sales tax. Finally, you will have to pay taxes quarterly or annually to ensure tax compliance. An accountant in conjunction with a grooming management system, would be able to assist you with this entire process, ensuring that you’re in the clear, and that you can focus on what you love: grooming and taking care of pets.
Pet Business Software Reviews
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