In this tutorial, you'll practice how to set up an accounting system right from scratch for a hair salon or barbershop business using YAPBooks free accounting software and post daily transactions too.
Access YAPBooks using this link and open it on your computer or mobile phone.
Follow this tutorial and post your first hair salon or barbershop transaction today.
What is a Hair Salon & Barbershop Businesses
A hair salon or barbershop is one of the most common service-based small businesses in every community - offering haircutting, styling, hair treatment, braiding, tinting, shaving, and beauty care.
These businesses handle daily cash transactions, employ multiple stylists or barbers, and depend heavily on customer flow and product sales (e.g., relaxers, hair creams, oils).
Despite their steady cash flow, many salon owners have no real accounting system. YAPBooks accounting software can completely transform the business. First, let us define the problems these types of small businesses suffer.
Pain Points of Hair Salon Owners
Here’s what most salon owners struggle with:
- No record of daily income – They collect cash and transfers but never summarize daily totals.
- Product confusion – They buy creams, gels, and relaxers but don’t know which ones actually sell.
- Commission tracking – Stylists and barbers are often paid per job, but there’s no transparent tracking.
- Rent and supply costs – They can’t tell how much is spent monthly on products, generator, or rent.
- Lack of business insight – No idea what months are profitable or where cash is leaking.
For accountants, these gaps are opportunities to help them structure, track, and grow profitably.
Opportunities for Accountants
Hair salons and barbershops are perfect clients for freelance accountants and accounting students. They are everywhere, deal in cash daily, and need financial structure.
With YAPBooks, you can help them:
- Set up a working accounting system
- Track daily sales by stylist or service
- Manage expenses (rent, utilities, supplies)
- Monitor stock for hair products
- Generate monthly profit reports
Each salon client can pay ₦10,000–₦25,000 per month for bookkeeping and performance reporting and you can manage 10 or more with ease, offline or remotely.
Practical Business Example
Let’s say your client is “Glow Touch Beauty Salon”, located in Lagos.
Here are their average monthly figures:
| Item | Amount (₦) |
|---|---|
| Average daily customers | 25 |
| Average service fee per customer | 3,000 |
| Monthly sales (25 x 30 x 3,000) | 2,250,000 |
| Monthly product purchases (creams, relaxers, etc.) | 350,000 |
| Rent & utilities | 150,000 |
| Staff wages (4 stylists @ 60,000 each) | 240,000 |
| Miscellaneous expenses | 60,000 |
They want to know:
“How much profit are we really making each month?”
Let’s answer that using YAPBooks. Remember to access YAPBooks using this link
Step-by-Step: How to Set Up Salon Accounting in YAPBooks
Step 1: Create a New Company
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Open YAPBooks.
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Click “Add New Company.”
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Enter:
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Company Name: Glow Touch Beauty Salon
Business Type: Beauty / Services
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Reporting Currency: ₦ (Naira)
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You now have a clean accounting workspace.
Step 2: Build a Simple Chart of Accounts
Let’s customize accounts that fit salon operations.
Assets
- 101 – Cash at Hand
- 102 – Bank Account
- 103 – Salon Equipment
- 104 – Product Inventory
Liabilities
- 201 – Payables (Suppliers)
- 202 – Staff Commission Payable
Income
- 301 – Hair Styling Income
- 302 – Haircut Income
- 303 – Product Sales
Cost of Sales
- 401 – Hair Products Used
- 402 – Styling Supplies
Expenses
- 501 – Rent & Utilities
- 502 – Staff Salaries
- 503 – Cleaning & Maintenance
- 504 – Transportation & Logistics
- 505 – Miscellaneous
These categories make it easy to separate service income from product income.
Step 3: Record Opening Balances
Assume the salon starts with:
- Cash at Hand – ₦100,000
- Bank Account – ₦300,000
- Inventory (Products) – ₦200,000
- Equipment (Dryers, Clippers, Mirrors) – ₦500,000
Owner’s Capital = ₦1,100,000
Journal Entry:
| Account | Debit | Credit |
|---|---|---|
| Cash | ₦100,000 | |
| Bank | ₦300,000 | |
| Inventory | ₦200,000 | |
| Equipment | ₦500,000 | |
| Owner’s Capital | ₦1,100,000 |
This sets the financial position correctly.
Step 4: Record Purchases from Vendors
On January 2, Glow Touch buys products worth ₦120,000 on credit from StylePro Distributors.
Go to Suppliers → Bills
- Vendor: StylePro Distributors
- Description: Hair products & supplies
- Amount: ₦120,000
This updates Inventory and Payables automatically.
Step 5: Record Daily Sales
On January 3, they record:
| Type | Amount (₦) | Payment |
|---|---|---|
| Styling | 45,000 | 25,000 Cash, 20,000 POS |
| Haircuts | 20,000 | 20,000 Cash |
| Product Sales | 15,000 | 15,000 POS |
Go to Customer → Invoices
Post:
- Hair Styling Income – ₦45,000
- Haircut Income – ₦20,000
- Product Sales – ₦15,000
Total = ₦80,000 for the day.
Tip: Do this daily to track performance easily.
Step 6: Record Expenses
Let’s post January 5 expenses:
| Item | Amount (₦) | Account |
|---|---|---|
| Rent | 50,000 | Rent & Utilities |
| Staff Wages | 60,000 | Staff Salaries |
| Power (Fuel & NEPA) | 15,000 | Rent & Utilities |
| Cleaning | 5,000 | Cleaning & Maintenance |
Go to Journal Entries → New Journal and record each under the right account.
Step 7: View Profit and Loss Report
Go to Reports → Profit & Loss.
Here’s a sample snapshot for January:
| Category | Amount (₦) |
|---|---|
| Total Income (Styling + Haircuts + Product Sales) | 2,250,000 |
| Less: Cost of Sales (Products Used, Supplies) | (350,000) |
| Gross Profit | 1,900,000 |
| Less: Expenses (Rent, Wages, Utilities, etc.) | (450,000) |
| Net Profit for the Month | ₦1,450,000 |
The salon owner now sees real profit for the first time.
Step 8: Manage Payables and Staff Commissions
Let’s say stylists earn 10% commission on total styling income.
From ₦1,350,000 styling sales → Commission = ₦135,000.
You can record:
- Debit: Staff Commission Expense ₦135,000
- Credit: Staff Commission Payable ₦135,000
Once paid, reverse with:
- Debit: Staff Commission Payable ₦135,000
- Credit: Cash/Bank ₦135,000
Now, even commission payouts are traceable.
Step 9: Generate Reports for the Owner
With YAPBooks, you can generate summaries:
- Top Income Sources (Haircuts vs Styling vs Products)
- Top Expenses (Rent, Staff, Power)
- Cash Flow Report
- Net Profit Trend per Month
Tip: You can export or show this live from the dashboard.
Step 10: How Accountants Can Make Money
Once you’ve set up YAPBooks for one salon, you can:
| Service | Description | Suggested Price |
|---|---|---|
| Monthly Bookkeeping | Record sales, expenses, and generate P&L | ₦10,000–₦15,000 |
| Salon Accounting Setup | One-time company setup in YAPBooks | ₦20,000 |
| Staff Commission Tracker | Custom setup for stylist pay | ₦10,000 |
| Monthly Performance Report | Full breakdown + insights | ₦5,000–₦10,000 |
If you manage 10 salons, that’s ₦100,000–₦200,000 per month - fully offline, right from your laptop with YAPBooks.
Conclusion
Salon and barbershops are clearly businesses. And every profitable business needs numbers that make sense.
With YAPBooks, you can help them:
- Track daily income accurately
- Control product and supply usage
- Manage staff payments transparently
- Know monthly profit at a glance
For accountants, it’s a steady source of clients and recurring income.
