Medical spa bookkeeping: three revenue streams and syringe-level inventory

Service, retail, and membership are three different revenue events

A treatment is revenue when it is performed. A serum is revenue at the register. A membership or prepaid package is not revenue at all on the day it sells — it is a liability that becomes revenue as credits are redeemed. Medspas push all three through one booking platform, so the first bookkeeping job is separating them before they hit the ledger:

Platforms like Jane, Mindbody, or Square report sales the day money moves, which is exactly wrong for packages and gift cards. We post those to liability accounts and run a monthly deferred-revenue rollforward: sold, redeemed, remaining. Unredeemed balances only leave the liability with an expiry policy behind them — quietly recognizing stale gift cards is how medspas overstate a year.

Injectables are inventory at cost — track them by the unit

Neurotoxin and filler spend is the biggest cost line in most injector-led spas, and it arrives in vials and syringes, not treatments. We carry Botox, Dysport, and filler as inventory at cost per unit: the vial price divided into units, relieved to cost of sales as charting shows units injected. Each month we reconcile three numbers — units purchased, units charted, units counted on hand — and the gap gets a name: reconstituted vials that expired, cold-chain spoilage, comps, or charting that missed a syringe.

Unit-level books turn arguments into arithmetic. They show gross margin per treatment category, product cost per appointment by injector, and whether a volume discount from the distributor actually reached the margin line. A spa that expenses vials on purchase has none of this — just a supplies line that swings with ordering, not with treatments.

Taxable by default, exempt only with the chart to prove it

Since the 2010 federal budget, procedures done purely for cosmetic reasons are excluded from the health-care GST/HST exemption — wrinkle treatments, dermal filler, and laser hair removal are taxable sales, and most medspas are well past the $30,000 small-supplier threshold. The same syringe can be exempt when the purpose is medical — hyperhidrosis or migraine treatment under a physician's care — but the exemption is carried by the clinical record, not by the price list. We keep exempt sales in their own accounts so the HST return reflects the charts.

Mixed taxable and exempt sales also mean input tax credits get apportioned. The good news runs in your favour: a mostly-taxable medspa recovers most of the HST it pays, including on six-figure laser and device platforms — which we capitalize and depreciate through capital cost allowance rather than burying in expenses.

Medical director fees, injector splits, and who bills whom

Nurse-led medspas operate under physician oversight, and the medical director fee deserves its own expense account with the agreement on file. Directorship is an administrative service, not exempt patient care, so expect HST on the physician's invoice — an input tax credit for a taxable spa, a real cost if you lose track of it. When the MD also assesses patients and bills them directly, that money is the physician's revenue, not the spa's; the ledger has to keep the two flows apart or both sides' filings drift.

Commission injectors get the same discipline: revenue tracked by provider, product cost attributed to the treatments they performed, and contractor invoices matched to the calculation monthly, so the split is a report rather than a negotiation.

The month-end picture — and the imports behind it

Our close for a medspa shows revenue by stream, the deferred-revenue rollforward, the unit-count inventory reconciliation at cost, margin by treatment category, and HST collected against apportioned credits — the numbers a growing spa needs before adding a room or a device lease. Because devices and consumables often come from US vendors in USD, the purchasing side has its own wrinkles; our cross-border tax guide for medical spas covers imports and the taxable-exempt line in depth, and our bookkeeping services page shows how the monthly close runs.