When it comes to spa financial management, there’s one chart that matters most
to spa directors: the profit-and-loss (P&L) statement, also known as the income
statement. The P&L is also frequently named as a point of confusion for spa
directors both new and old. Let’s take a look at a sample P&L from Financial
Management for Spas and break it down to get to the heart of what it can tell you
about your spa’s performance.
any sPa
statement of income (short version)
for month ending march 31, 20xx
net revenue
$00285,058
total direct expenses
00181,116
gross margin
103,942
total indirect and undistributed expenses
69,908
income Before fixed charges
0034,034
fixed charges
007,417
income Before depreciation, amortization,
interest expense, & income taxes
6,667
Interest Expense
(Gain) and Loss on Disposal of Property
income taxes
net income
This P&L is based on the practices and standards of
the Uniform System of Financial Reporting for Spas
(USFRS).
Indirect and Undistributed expenses
include marketing, administrative costs,
maintenance, utilities, support labor,
and other expenses that are difficult to
tie to any particular department. for
example, it’s tough to track the cost of
robes used for massages and facials
separately; instead, that’s considered an
undistributed expense.
26,617
Depreciation and Amortization
income Before income taxes
your spa’s gross margin is indicated
here, and is the result of taking net
revenue (the amount of money made
from goods and services) and
subtracting total direct expenses (the
cost to sell or provide those goods and
services).
2,500
(4,167)
21,617
6,250
$00015,367
We’ve arrived at the end—net
Income! When all is said and done,
net income is the amount of profit
pocketed by the spa during this
accounting period.
it would be unusual for a spa director to
be responsible for these numbers, but
it’s still important to know what they
are. here, the P&L shows depreciation
of assets, as well as amortization of any
intangible assets. it also shows gains
and losses, which are different from
profit and loss resulting from opera-
tions. an example of a loss would be
damage caused by a flood, hurricane or
other act of nature.
at this point, a P&L shows Income
Before Income taxes, then
subtracts any income tax. it’s worth
it to note that, according to Financial
Management for Spas, income taxes
listed on a P&L are rarely the same
as those shown on a tax return due
to differences in accounting methods.
MAY
■
PULSE 2019
33