As a self-employed hairdresser, tracking your income and expenses is essential to running a successful business. Keeping a close eye on your financials not only ensures you're prepared for tax season but also helps you make informed decisions to grow your business. Here’s how you can track your income and expenses effectively.

1. Use a Simple System for Tracking

   The first step to managing your income and expenses is to set up a clear system. Having a simple way to record all incoming payments and outgoing expenses is essential. You can use accounting software like Xero, which can be connected to your FroHub account for automatic tracking of your bookings and payments.

2. Record Every Transaction

   Every time you receive payment or pay for an expense, record it right away. Whether it’s a client paying for a service or a purchase for your salon supplies, make sure it’s documented. This will help you keep track of where your money is going and ensure you don't miss any deductions when tax season arrives.

3. Separate Personal and Business Finances

   It’s crucial to keep your personal and business finances separate. This will make it much easier to track your income and expenses and avoid confusion at tax time. Consider opening a separate bank account for your hairdressing business. This will allow you to easily see all your business transactions in one place.

4. Categorise Your Expenses

   To make tax preparation easier, categorise your expenses. This could include supplies, marketing, equipment, rent, and travel. By categorising your expenses, you can identify areas where you might be overspending and where you can save. Most accounting software allow you to categorise expenses automatically, saving you time and effort.

5. Keep Receipts and Invoices Organised

   Always keep receipts for business-related purchases. This will help you when you need to claim deductions. If you’re using paper receipts, consider scanning them and storing them digitally. Organising your invoices will also help you stay on top of your accounts and prevent missing payments.

6. Regularly Review Your Finances

   Set a regular time each week or month to review your financial records. This will help you spot any inconsistencies or areas where you need to improve. Regular reviews also ensure that you're on track to meet your financial goals and can help you adjust your budget or plans as needed.

7. Set Financial Goals

   By setting financial goals, such as saving a certain percentage of your income or aiming for a specific profit margin, you can keep yourself motivated and on track. Use FroHub’s goal-setting tools to set and track your income, expenses, and savings targets. Monitoring your progress toward these goals will keep you focused and help you make data-driven decisions.

8. Use FroHub to Track Bookings and Payments

   FroHub makes it easier to track income from your bookings automatically. By connecting your FroHub account with your accounting software, you can have a real-time view of your earnings, helping you to stay on top of your finances without having to manually input every transaction.

9. Consider Professional Help

   If tracking your income and expenses feels overwhelming, don’t hesitate to seek help from a professional accountant. They can help you set up an organised system, categorise your expenses, and ensure you're making the most of your deductions.

Tracking your income and expenses effectively is key to managing your finances as a self-employed hairdresser. By setting up a simple system, keeping records organised, and reviewing your finances regularly, you can ensure that your business runs smoothly and that you’re well-prepared for tax season. When you use accounting software the key is consistency and organisation. With tools like FroHub, you can streamline your financial management and focus more on growing your business.