Dance studio bookkeeping: tuition you have collected but not yet earned

Tuition and packages are prepaid liabilities

A September enrolment payment for a season that runs to June is not September income — it is a deferred revenue liability that converts to income as classes are delivered. The same logic covers ten-class cards, which earn out per punch, and instalment plans, which earn in the month taught rather than the month charged. The distinction is not cosmetic: it is the difference between a studio that looks rich every fall and broke every spring, and books that show what the business actually makes.

Studio software such as Jackrabbit Class is excellent at scheduling and billing, but its standard revenue report is usually cash collected, not revenue earned — the single most common error we correct in studio books. We map the software's billing export into QuickBooks Online with the deferral built in, and we write down the policy for the awkward cases: refunds, credits on withdrawal, makeup classes, and unused punches that eventually expire.

The recital is a business inside the business

Recital money behaves like a small event company grafted onto the studio. Recital fees are charged in winter for a June show, so they defer like tuition; ticket sales, program ads, and video orders arrive close to show week; and the costs — venue rental, tech crew, videography, programs, trophies — all cluster into one month. Tracked as its own class in the books, the recital produces a clean answer to a question most owners only guess at: whether the show makes money, breaks even, or is a marketing cost the tuition side quietly carries. Any of those can be the right answer, but only on purpose.

Costume money is a pass-through — keep it off the top line

Costume fees collected per dancer are not revenue; they are money held to buy costumes. We run them through a costume clearing account: fees in, supplier invoices out, and only a deliberate markup — if the studio charges one — recognized as income. Booked as ordinary sales instead, costume season inflates revenue with dollars that were never margin, distorting every ratio a lender or buyer would read.

Most costume suppliers ship from the US, which adds USD invoices, duty, and brokerage into the clearing math and an FX policy to keep it consistent — border-cost details sit on our cross-border tax page for dance studios. Costumes the studio resells are taxable goods, so a registered studio charges HST on the fee and claims the input tax credits on the supplier side.

HST: dance is not music, and the exemption rarely helps

Dance classes at a for-profit studio are generally taxable for GST/HST — the well-known exemption for music lessons does not extend to dance, and the narrower exemptions, such as instruction credited toward a school curriculum or children's programs run by public service bodies, rarely cover a commercial studio. Tuition alone carries most studios past the $30,000 small-supplier threshold quickly, and registration brings input tax credits back on rent, mirrors, flooring, and sound. Pricing needs to be set knowing whether the posted fee is tax-in or tax-extra, before the season sheet goes out.

Instructors, privates, and the retail shelf

The rest of the money follows the same discipline. Instructors are either employees on payroll or contractors who invoice — with T4A slips where fees for services call for them — and the books keep whichever paper trail the classification demands, because a contractor treated like staff is a reassessment waiting for a trigger. Private lessons and drop-ins are earned when delivered, and the small retail shelf of tights and shoes is inventory with cost of goods sold, not an expense on purchase. The monthly rhythm that holds it together — reconciled feeds, a deferred-revenue schedule that ties to enrolment, and statements an owner can read in ten minutes — is described on our bookkeeping services page.