Why Managers are Investing in Salon Software with Payroll Features

Using a single comprehensive solution streamlines operations

Manage the schedule. Update the service menu. Keep track of inventory. Train new team members. Run payroll. Salon owners have no shortage of tasks on their to-do lists, which is why they’re always searching for ways to streamline operations. To make things even trickier, paying employees at a salon is often more complicated than other consumer businesses due to tiered and commission-based pay structures.

You could do a lot of extra paperwork to crunch the numbers, or you could invest in salon software with payroll features. By choosing a comprehensive solution and making use of its reporting capabilities, you can check your salon payroll task off your list more quickly and get back to running your empire.

The challenges of salon payroll

Salon payroll has its own set of unique challenges compared to other small businesses. Employees are often a mix of full-time, part-time, and contract employees, some of whom may also be working on commission. That adds up to a lot of different reporting structures and tax forms like 1099-NECs and W-2s — and that’s before you even do the math on tips and commissions.

When you’re just starting out with a handful of service providers, this may not feel like a Herculean task. But as your business grows, expands to multiple locations, and adds new providers at varying rates and skill levels, it becomes increasingly necessary to lean on your salon software to carry the load. However, if the platform you use doesn’t have the right reporting features, you’ll still be facing a lot of manual math.

For example, RUMA Aesthetics COO Jordan Miller reported that payroll took “eight to ten hours every two weeks” before the medspa switched to a more modern solution. “We had all these additional spreadsheets to keep of payments and commissions,” she said. “It was a nightmare.”

How comprehensive reporting streamlines payroll

Reporting is an essential part of any salon software. You need to be able to track your progress and make data-driven decisions in order to meet your goals and grow your business. After all, how can you fix what’s not working if you don’t know what’s not working? And how can you capitalize on your most popular services and products if you don’t know which ones are exceeding expectations?

The best options go beyond basic profit and loss reporting and let you drill down on your data at the most granular level. How do you know if your platform supports deeper reporting and streamlines salon payroll? By prioritizing these features:

• Customizable templates: Your salon isn’t like any other, so why should you use the same reporting template as everyone else? Being able to leverage predefined templates and mold them to suit your needs makes it easier to find the data you’re looking for.

• Smart filters: When it comes time to run payroll, you should be able to easily include or exclude data relevant to that task. Look for software that allows you to sort through information without having to spend hours modifying spreadsheets.

• Export and share: Your reporting software may not be the application that physically processes payroll, but the two should pair well together. Make sure you’re in total control of your reports and can export them easily into your payroll processor of choice. 

• Commission support: Since many self-care providers work on commission, you’ll need to be able to track both flat-rate and tiered compensation models. This is one of the things that makes salon payroll so challenging, so set yourself up for success by ensuring your solution suits your business.

The difference the right software makes

When you have full visibility into and control of your payroll operations, you can take your salon to new heights. You’ll be able to see where you can spend more and which employees are bringing in the most business while avoiding costly payroll mistakes that will eat into your budget.

In the example we mentioned above, Miller was able to reduce payroll processing times by 75% while also increasing total hours booked, utilization rates, and membership rates. All of these factor into the overall health and success of a self-care business, which is why having software with comprehensive reporting is so critical. Ask yourself this: If you could drastically reduce the hours you spend on payroll, what could you accomplish with that extra time? Think about the answer when you’re weighing the benefits of upgrading your salon software.