How salon and clinic owners can improve their cash flow

how salon and clinic owners can improve their cash flow

Managing cash flow is a crucial aspect of running a successful business. If you often find yourself struggling to pay your employees due to insufficient cash flow, then you’ve come to the right place. In this blog post, Melanie Beech, Director of the Salon Expert Accountants will provide you with her top 6 tips to enhance your cash flow management. But before we delve into the tips, let’s first understand the concept of cash flow and why it is vital for your business.

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What is Cash Flow?

Cash flow refers to the movement of money in and out of your business. This includes the funds coming into your business, such as card payments, cash, and direct debits, including revenue generated from membership schemes. On the other hand, it also includes the money going out, such as rent, employee salaries, product purchases, and stock expenses. Effective cash flow management ensures that you have sufficient incoming funds to cover your outgoing expenses, eliminating the need for borrowing and ensuring you have enough money to pay everyone when they need to be paid.

Tip #1: Know Your Numbers

To improve cash flow, it’s crucial to have a comprehensive understanding of your financial situation. Regular bookkeeping and utilising tools like QuickBooks can help you track and review your cash flow. By staying updated with the exact amounts entering and leaving your business each month, you can effectively plan and prepare for your financial obligations.  If you find your bookkeeping is always out of date then outsource your bookkeeping to a professional.  We offer monthly bookkeeping packages that will help improve your cash flow.

Tip #2: Maintain Consistent Director Payments

Consistency is key when it comes to paying directors in your business. Instead of impulsively withdrawing funds based on what’s in your bank account, consult with your accountant to determine a sustainable monthly pay rate. This approach shows effective planning, ensures sufficient funds for all expenses, and allows for better personal financial planning, regardless of business fluctuations.

Tip #3: Implement a Monthly Membership Scheme

Consider introducing a monthly membership scheme.  Encourage clients who regularly undergo expensive treatments to pay on a monthly basis. By securing a significant number of clients on the membership scheme, you can reliably cover your monthly overheads, irrespective of variations in how busy your salon or clinic is.

Tip #4: Opt for Monthly Direct Debit Payments

Whenever feasible, choose to pay bills and direct debits on a monthly basis rather than quarterly or annually. Monthly payments simplify financial planning since you don’t have to allocate funds each month specifically for those larger expenses. However, keep a close eye on any potential additional costs associated with monthly payments.

Tip #5: Reduce Stock Levels

Maintaining excessive stock levels ties up valuable cash that could be better utilised elsewhere. Analyse your inventory and identify slow-moving products or those with limited demand. Consider purchasing slightly less stock initially and ordering more later if necessary. This approach ensures that your cash remains accessible in the bank instead of being tied up in unsold inventory.

Tip #6: Consolidate Supplier Orders Monthly

To enhance planning and tracking, aim to order from suppliers only once a month. Frequent orders throughout the month make it challenging to keep an accurate record of expenditures, which can quickly accumulate. By ordering once a month, you can anticipate your needs for the upcoming month based on salon software data or specific treatments. This practice promotes better planning and minimizes multiple deliveries throughout the month.


Improving cash flow is essential for the financial well-being of your business. By implementing these six tips, you can enhance your cash flow management and avoid financial strain. While these tips provide a solid foundation, there are numerous other strategies to explore.

If you require further assistance in managing your business finances or seeking a more reliable accountant, reach out to us, here at the Salon Expert Accountants by booking a discovery call.  Take control of your cash flow and set your business on a path to financial stability.