October 27, 2026 · Mitt Patel · 5 min read
You placed a $900 color order on the 3rd, and your bookkeeping shows a rough month. Three weeks later, you're running low on developer even though you've been coloring clients at the usual pace, and the same report says you had a great month. Nothing about how busy the salon actually was changed in between.
Why this happens
Most salons record backbar and color costs the way they record any other purchase: the full amount hits your books the day you pay for it. That's simple, but it creates a mismatch. A big color order might cover six or eight weeks of services. If you expense the whole thing on arrival, that one month looks expensive and every month after looks cheap, even though clients were getting colored at roughly the same rate the whole time.
This matters because owners use monthly profit numbers to make real decisions. If a slow month on paper lines up with a big order, you might cut staff hours, delay a hire, or hold off on a price increase, when the business itself didn't change. If a fat month on paper lines up with an order gap, you might think you have room to spend on something else when you're actually just between purchases.
The fix isn't complicated. It's tracking backbar cost as its own line, separate from retail product and supplies, and looking at it next to service revenue over time instead of order by order.
A worked example
Say your salon brings in $20,000 in service revenue in a month. You buy color and developer in bulk, and your orders land unevenly: $900 in one month, $200 the next, $700 the month after that, depending on when you happen to restock.
If you expense each order the day it's paid, your backbar cost looks like 4.5% of revenue one month, 1% the next, and 3.5% the month after, based on orders of $900, $200, and $700 against $20,000 in monthly service revenue. None of those numbers tell you much on their own, because they're driven by your order schedule, not by how much color you actually used on clients.
Now say you track what you actually use. You estimate, based on purchase patterns, that backbar costs run close to 10% of service revenue most months once things even out. On $20,000 in services, that's about $2,000 a month in color, developer, and related product, whether you happened to place a big order that month or not.
With that steadier number, you can watch for real changes. If backbar cost creeps up to 11% of service revenue over a couple of months, with no change in how many color services you're doing, that's worth a look. It might mean waste, over-pouring, product walking out the door, or a supplier price increase. You can't see any of that if your monthly number is just reflecting when you happened to place an order.
How to set it up
- Open a separate account for backbar. In QuickBooks Online, create a distinct expense account for color, developer, and other products used on clients, separate from retail inventory and separate from general supplies.
- Record purchases as they happen, but track them against revenue, not in isolation. Keep the purchase date and amount, but don't judge any single month by that one number.
- Calculate your backbar percentage each month. Divide total backbar spend by service revenue for the same month. Do this for at least three or four months before drawing conclusions, since order timing will still cause some bounce.
- Look at a rolling average, not a single month. A three-month rolling average of backbar cost as a percentage of service revenue smooths out the lumpiness from order schedules and gives you a number you can actually trust.
- Set a baseline range for your salon. Once you have a few months of data, you'll have a sense of what's normal for your mix of services. That baseline becomes the thing you compare future months against.
- Flag it when the percentage moves outside your normal range. That's your signal to look closer, whether it's checking for waste, confirming staff are using products correctly, or checking supplier pricing.
What undoes this
- Mixing backbar with retail or general supplies. If color and developer are lumped in with shampoo you sell to customers or with towels and gloves, you lose the ability to see the backbar trend clearly.
- Judging a single month instead of a trend. One month of data will almost always be skewed by whatever you happened to order. The percentage only becomes useful once you're looking at a few months together.
- Forgetting to update the baseline as your service mix changes. If you add more color services or shift toward lower-maintenance styles, your normal backbar percentage will shift too. A baseline from two years ago may not fit today.
- Not separating owner-use or sample product from client-use product. If you're using backbar product for your own hair or giving away samples, that can distort the numbers if it's not tracked separately.
Monthly checklist
- Record all color, developer, and backbar purchases in their own account.
- Calculate backbar spend as a percentage of that month's service revenue.
- Update your three-month rolling average.
- Compare the current percentage to your established baseline range.
- Note any big order timing that might explain a one-month spike or dip.
- Flag any sustained move outside your normal range for a closer look.
Common questions
What counts as backbar versus retail?
Backbar is product used on clients during a service, like color, developer, bleach, and treatment products applied in the chair. Retail is product sold directly to customers to take home. They should be tracked in separate accounts because they behave differently and tell you different things.
How many months of data do I need before the percentage means anything?
Three to four months is a reasonable starting point, especially if your orders are spaced out unevenly. The goal is to get past at least one or two full order cycles so the rolling average isn't skewed by a single large purchase.
What's a normal backbar percentage?
It depends heavily on your service mix, how much color work you do versus cuts and other services, and your local supplier pricing. There's no single right number. What matters more is finding your own salon's typical range and watching for real deviations from it.
Should I track backbar cost per stylist too?
That can be useful once you have the overall salon number under control, since it can help spot differences in product use between technicians. It's a reasonable next step, but start with the salon-wide number first so you have a baseline to compare individual numbers against.
Setting up accounts this way and keeping them current takes some upfront work, and it's easy to let it slide once things get busy. North Hudson Bookkeeping can help salon and barbershop owners set this up and keep it updated month to month, so the numbers are ready when you need them. The first call is free.
