The Bookkeeping Mistake Nail Salons Keep Making—And How to Avoid It

Running a nail salon takes more than great polish and a steady hand. As a salon owner, you juggle staff, clients, inventory, and appointments. But what often slips through the cracks is one critical area: bookkeeping.

At Tiki Tax, we help nail salon owners across Canada avoid costly tax mistakes—and one of the biggest? Misclassifying supplier invoices. This error might seem small, but it could cost you thousands come tax season or even trigger a CRA audit.

1.What’s on a Typical Nail Salon Invoice?

Let’s say you place an order with your regular supplier. On one invoice, you might see:

💅 Gel Polish – this is a Cost of Goods Sold (COGS) item.

🖌 Brushes – these fall under Salon Supplies.

💡 UV Lamp – this is an Asset, which should be capitalized and depreciated over time.

Each of these items belongs to a different bookkeeping category.

2. The Common Mistake: Posting Everything Under “Supplies”

Too often, we see well-meaning business owners or even inexperienced bookkeepers lump everything under “Salon Supplies”. It’s quick, it’s easy—but it’s incorrect.

Here’s why that’s a problem:

• COGS affects gross profit. Misplacing it can skew profitability.

• Assets like UV lamps must be tracked separately and depreciated annually.

• CRA audits may flag these mismatches, resulting in penalties or denied deductions.

This means you could be underreporting income, overstating expenses, or missing capital deductions—each a recipe for red flags with the Canada Revenue Agency.

3.Why Accurate Categorization Matters for Tax Season

Smart categorization is more than tidy records—it’s tax protection.

• You maximize eligible deductions.

• You avoid interest and penalties from misreported data.

• You gain better insights into where your business is really making or losing money.

Plus, if you ever face a CRA audit, detailed and accurate records make the process smoother—and far less painful.

4. How Tiki Tax Helps Nail Salons Succeed

At Tiki Tax, we specialize in helping small businesses—especially personal care and beauty industries—manage their finances with clarity and compliance.

Here’s how we support nail salons:

✅ Smart categorization of supplier invoices

✅ Asset tracking and depreciation schedules

✅ Monthly bookkeeping & GST/HST support

✅ Personalized tax planning and audit defense

Whether you run a single salon or manage multiple locations, our bookkeeping ensures you stay compliant, save on taxes, and gain peace of mind.

Get Started with Tiki Tax Today

Don’t let a UV lamp or a brush become a tax-time burden. Let us help you keep your books clean, compliant, and audit-ready.

👉 Visit TikiTax.ca to learn more or book your free consultation today.
📞 Contact our team to get a customized bookkeeping plan for your salon.