Running an integrated medspa integrates business management science with the art of holistic health and beauty. Knowing how your company is doing at any one moment is fundamental for financial success. Here is where the COA, or chart of accounts, finds application. By structuring and organizing your COA, you can make informed financial decisions that drive growth while keeping your financial reports clean and accurate.
Why Do Integrative Medspa Professionals Need a Chart of Accounts?
As an integrative medspa professional, keeping track of your finances is vital—not just for tax purposes but also for making sound business decisions. A well-structured COA ensures that your financial statements, such as the profit and loss statement (P&L) and balance sheet, are both accurate and easy to understand. This clarity allows you to quickly assess your business’s financial health, whether you’re planning new service offerings or managing day-to-day expenses.
Putting your income, costs, assets, and debts into clear groups helps you see which services make you the most money, where you might be spending too much, and which investments are paying off. In the end, a well-kept COA helps you stay proactive and make decisions that will help your business grow in the long run.
What is a Chart of Accounts?
A Chart of Accounts (COA) is a systematic way of categorizing all of a company’s financial accounts. In essence, it’s a detailed map of every dollar coming in and going out of your business. A typical COA is divided into five core categories: Assets, Liabilities, Equity, Income, and Expenses.
Separating financial transactions into these categories helps you build a system that facilitates reporting and recordkeeping. Running a good medspa depends on your COA, which is the basis for your financial reports hence it is a necessary instrument.
Essential Components of a COA for Medspa Professionals
Asset Accounts
Assets represent anything your medspa owns that has value, such as cash, equipment, and inventory. These accounts track resources that contribute to the value of your business.
1010 Checking | Your business’s primary bank account. |
1020 Savings | A reserve account for larger future expenses. |
1030 Accounts Receivable | Money owed to you by clients or vendors. |
1040 Inventory | Skincare products or medical supplies for resale. |
1050 Property | If your Medspa owns the building. |
1060 Equipment | High-value tools like lasers or facial devices. |
Liability Accounts
Liabilities are the debts your medspa owes. These accounts help you keep track of outstanding obligations, like loans or unpaid bills.
2010 Accounts Payable | Vendor or supplier bills that haven’t been paid yet. |
2020 Sales Tax Payable | Sales taxes collected from clients but not yet remitted to the government |
2030 Payroll Tax Payable | Unpaid payroll taxes for staff. |
2040 Equipment Loan | Financing for medspa equipment. |
2050 Other Loans | Other debt obligations, such as a business expansion loan. |
Equity Accounts
Equity represents the owner’s investment in the business. This includes money you’ve personally invested and profits retained within the company.
3010 Owner’s Contributions | Funds invested by the owner. |
3020 Retained Earnings | Business profits that are reinvested instead of distributed. |
Revenue Accounts
Revenue accounts track all the income your Medspa generates from services and product sales.
4010 Professional Fees | Revenue from services like Botox, facials, and wellness treatments. |
4020 Retail Sales | Income from selling skincare products or supplements. |
4030 Discounts | Reductions in revenue from sales discounts. |
Cost of Goods Sold (COGS)
COGS tracks the direct costs associated with the services and products your medspa offers.
5010 Medical Supplies | Costs of injectables, fillers, and other consumables |
5020 Lab Expenses | Expenses related to diagnostic services |
5030 Retail Expenses | Costs associated with reselling products. |
5095 Inventory Adjustment | Adjustments for shrinkage or damaged goods. |
Expense Accounts
Expenses record all the costs required to operate your Medspa, from payroll to rent to utilities.
6001 Advertising & Marketing | Costs of promoting your medspa. |
6005 Bank Service Charges | Fees from your financial institutions. |
6010 Insurance
| Protection for your business assets. |
6020 Maintenance & Repairs | Keeping equipment in working order. |
6030 Rent Expense | Cost of leasing your medspa’s space. |
6060 Payroll Expenses
| |
6075 Telephone & Internet | Communication costs. |
6080 Utilities | Electricity, water, etc. |
How Should Integrative Medspa Professionals Organize Their Chart of Accounts?
The great news is that most accounting software, such as QuickBooks, provides a ready-made COA template that you can customize to fit your medspa’s needs. However, it’s important to keep your COA simple. Include only the accounts that are absolutely necessary to meet your reporting requirements. For example, break down revenues by service type (e.g., facials, laser treatments) to better understand which are most profitable.
The simpler your COA is, the easier it will be to manage your finances, especially as your business grows.
How the COA Impacts Financial Reporting
Your financial reports—which include Cash Flow Statements and Profit and Loss Statements (P&L)—directly feed your COA. These studies give the information you need to make key business decisions such as whether to increase services, make new equipment investments, or staff hire. Maintaining correct and current COA guarantees the dependability of your financial reporting, thereby facilitating much simpler decision-making.
Running a medical spa is demanding enough without the added pressure of managing your books. If you’re in the Irvine area, consider outsourcing your bookkeeping to professionals who specialize in Medspa accounting. By working with experts, you can ensure that your COA is set up correctly and maintained accurately, so you can focus on growing your business. Outsourced bookkeeping services can also help you stay tax-compliant and avoid costly mistakes.
