What makes a med spa close different
A bookkeeper closing a plumbing company reconciles the bank, categorizes the expenses and prints a profit and loss statement. Do the same thing in a med spa and you get a P&L that is wrong in five specific places, every month, in the same direction.
Package and membership money arrives before the treatment, so it is a liability until the treatment is delivered. Neurotoxin is bought by the vial and used by the unit, often weeks later, so it is inventory until it is injected. Commissions are earned on this month's production and paid in next month's payroll, so they have to be accrued. The merchant processor deposits one net number that mixes service revenue, retail, tips, gift-card loads, sales tax collected and processing fees. And the same chair can produce exempt treatment revenue and taxable retail revenue on a single ticket. Our close is built around those five adjustments, and each one is tied to a report from your POS rather than to a judgment call.
The ten business days
The close has a calendar because everything downstream waits on it: the sales tax return, the quarterly estimate, the commission run, the owner's decision about a device. Here is what happens between the first business day and the tenth.
| Business day | Work | Tied to |
|---|---|---|
| 1–3 | Bank, card, loan and merchant accounts reconciled in QuickBooks Online; POS exports pulled (sales by category, outstanding balances, production by provider, tax collected) | Bank and processor statements |
| 3–5 | Deposits traced batch by batch; processing fees, tips, gift-card loads and sales tax collected posted to their own accounts instead of netted into revenue | POS batch report against the processor settlement |
| 4–6 | Package, membership and gift-card rollforward built; revenue recognized on redemptions; expirations and breakage reviewed under your state's gift-card rules | POS outstanding-balance report |
| 5–7 | Injectable and retail counts or POS usage reports reconciled to purchases; cost of goods sold booked by service line | Count sheet and vendor invoices |
| 6–8 | Commission accrual built from production and tied to the payroll register; payroll journal booked with provider wages separated from front-desk and management wages | POS production report and payroll register |
| 8–10 | Balance sheet schedules completed and reviewed by Jenny Gao, CPA, EA; report pack and open-items list delivered; the month locked | Signed-off balance sheet |
An illustrative close
An illustration, not a client. A single-location practice in Arizona with two injectors collects $130,000 in a month, before sales tax and tips. The POS shows that $30,000 of it was new package sales, $22,000 of older packages was redeemed, $11,000 was retail skincare and another $4,000 came in as tips for the providers. The processor deposited the month's batches net of $4,500 in fees. The practice received $25,000 of neurotoxin and filler, and the count shows $18,000 was used. Injector commissions on the month's production come to $27,000, paid on the 5th of the following month.
Booked from the bank feed, the month shows roughly $129,500 of revenue (deposits net of fees, tips included), $25,000 of product expense, no commission cost and no liability. Closed properly, it shows $122,000 of service and retail revenue ($130,000 collected, less $30,000 sold but not yet delivered, plus $22,000 redeemed), $18,000 of product cost with $7,000 still in inventory, $27,000 of commission accrued in the month it was earned, $4,500 of merchant fees as their own expense, $4,000 of tips as a pass-through to payroll rather than revenue, and a package liability that grew by $8,000. The first version makes the month look about $32,000 more profitable than it was, and makes the following month look $27,000 worse when the commission run hits. An owner pricing a promotion or signing a device lease off the first version is working from the wrong number. Our guide on how to read a med spa P&L walks through the same arithmetic line by line.
What you receive, and what we need from you
The report pack is the same every month so you can compare: P&L by service line with the trailing three months beside it, balance sheet, deferred-revenue rollforward, inventory summary, provider production and compensation summary, a KPI sheet (gross margin by line, product cost as a share of injectable revenue, provider cost as a share of service revenue, retail attach rate, change in deferred revenue) and an open-items list that names the handful of transactions we still need you to identify.
From you: report-level access to the POS, accountant access to QuickBooks Online, bank and card feeds, read access to payroll, a monthly count of neurotoxin, filler and retail (about fifteen minutes with the sheet we provide, or the POS usage report if your platform deducts units per treatment), and answers to the open-items list within a few days. Owners who keep that list short get their pack earlier. The monthly close checklist shows every step, and the chart of accounts guide shows how the ledger is laid out before the first entry.
Cash or accrual, and what this is not
We keep med spa books on an accrual basis for management, because the package liability, the inventory and the commission accrual are the three numbers that make the P&L true. Many practices still file their tax return on the cash method, and that can stay; the cash-method adjustments are carried on a schedule and the return is prepared from the same books. Our guide on cash versus accrual accounting for med spas explains why packages usually make the choice for you.
The close is a management close, not an audit, review or compilation; Balance Partners does not provide attest services. It is also not a forecast. The 13-week cash forecast and the monthly review meeting sit in the fractional CFO engagement, built on these closed numbers, and ownership of the close across an MSO and a professional entity, with lender and landlord reporting, is fractional controller work. For a single-entity practice, everything on this page is inside Med Spa Core.