We’re Massage Therapists, not Accountants. Accounting and Massage Therapy is not something one, generally, hears in the same sentence… except for here.
If your self-employed, or own a business, you do need to understand the basics. It’s when you don’t, that financial upset happens.
Business and Personal Accounting made Easy!!
Accounting Definitions
Assets:
Total Resources on hand
- Cash in bank account
- Equipment
- Inventory
- Receivables
Cash in the bank account is fairly self-explanatory. It’s the money in your account, daily, weekly, monthly, yearly… before, and after, expenses.
Equipment
Everything you need to run your business:
- Client chair(s)
- Massage Table / Chair
- Computer / Printer
- Desk
- Filing Cabinet
- Therapist chair, or stool
- Modality tools (cups/ stones/ hot packs, etc.).
- Linens (sheets/ towels/ face cradle covers)
- Mop / Vacuum
- Washer / Dryer
Inventory
I had two specific breakdowns of this. The first was for Office Use Only, the other was For Resale.
Office Use Only:
- Oils / Lotions
- Laundry soap / Dryer sheets
- Cleaning supplies
- Toilet Paper
- Paper towel
- Office supplies (Paper/ staples/ receipt ribbon/ ink)
- Receipt Book
- Postage
Inventory for Resale: The products you sell to clients for added value, and profit:
- Bath Salts / Products
- Massage Oils / Lotions
- Supplements
- Topical Pain Lotions
- Candles
Receivables: this is money owed to you.
- Billing Accounts (Insurance Companies)
- Rent from other Therapists
Liabilities
Accounts Payable
This is what you owe. Current and long term:
- The Bank
- Credit Card
- Loans
- Taxes
- Utilities
Capital
This is the net worth of a business. The difference between the Assets and Liabilities.
A good software program looks after all of this for you. Again, I refer to Quicken for my needs.
While all of the Accounting needs are met within a program, like Quicken, you should still understand the basics of accounting terms, and the bookkeeping aspects, in order to keep your finances running smoothly.
What do you do to keep financial order in your practice? Let me know!
Shaunna
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