Parlour Billing, VAT and Records in Nepal: A Simple Guide

Many parlours in Nepal run for years on handwritten receipts and a cash register that is counted at closing time. That can work until the day you open a second branch, apply for a loan, hire an accountant or need to prove what you earned. Clean daily records make all of those easier. This article explains what to record and which tax questions to settle with a professional. It is not tax advice.

What every bill should show

• A sequential bill number that never repeats.
• Date, and if you like, the Bikram Sambat date as well.
• Customer name or number, especially for packages and regulars.
• Each service with the stylist who performed it.
• Each product sold with quantity and price.
• Discounts, and who approved them.
• Payment mode: cash, bank or wallet QR, card, or package balance.
• VAT line if you are registered.

The sequential number matters. Gaps in numbering raise questions during any review, so decide how cancelled bills are handled and record the reason.

VAT: what to ask your accountant

Nepal's standard VAT rate is 13%. Whether your parlour must register and charge VAT depends on your turnover, the nature of your business and current rules, which the Inland Revenue Department publishes and updates. Do not rely on rumours from other shop owners. Ask your accountant:

1. Do I need to register for VAT at my current or expected turnover?
2. Do I issue prices inclusive or exclusive of VAT?
3. What bill format is required, and does it need to be generated from particular software?
4. How do I treat VAT on products I buy for resale and on supplies I use?

Once you know the answers, set up your bill format to match. WebsNP can configure billing to the format your accountant specifies, but we cannot decide your tax status. For a broader look at VAT-ready billing, see our VAT billing software page.

Services versus products

A parlour earns from services and from retail products, and the two behave differently. Services have no stock but depend on staff time. Products have a purchase cost, stock count and sometimes expiry dates. Keep them separate on the bill and in reports. Otherwise you cannot tell whether a good month came from skilled staff or from a shelf of cream you finally sold.

Consumables are costs, not sales

Hair colour, wax, towels and disposable items are consumed in services. Decide whether you track them as stock or simply record the purchase as an expense. For small parlours, expense tracking is often enough. For larger ones, tracking consumables per service shows the true cost of colour work, for example.

Daily closing routine

A short closing routine builds trust in your numbers:

1. Print or open the day's sales report.
2. Count the cash in the drawer and compare with cash sales minus cash expenses.
3. Check QR and card totals against the bank or wallet statements regularly.
4. Note any difference and the reason.
5. Record the cash handed to the owner or deposited in the bank.

Doing this daily means small differences are caught early, when staff still remember what happened.

Handling packages and advances

When a customer pays in advance for a package, you have received money for services you have not yet delivered. Record it as a package balance, not as ordinary sales of that day, and reduce the balance as visits are redeemed. Ask your accountant how this should appear in your books and for VAT purposes if applicable. A system that tracks package balances gives you the list of what you owe in services at any moment.

Expenses a parlour should record

Revenue is only half the picture. Record rent, electricity, water, staff salaries, product purchases, repairs, advertising and small daily expenses in categories. After three months you will see which cost is growing and whether a busy month is truly profitable. Many owners are surprised to find that small cash expenses, such as tea, transport and minor repairs, add up to a significant amount when written down.

Selling gift vouchers and advance bookings

If you sell gift vouchers around festivals or for weddings, treat them like packages. Give each a number, record the buyer and the value, and mark it redeemed when used. Set an expiry date that you state clearly at the time of sale. Unredeemed vouchers are a liability, so your reports should show how many are outstanding.

Keep records safe

Back up your data, and keep bill records for as long as the law requires. Ask your accountant how long that is. Electronic records should be exportable by Nepali fiscal year, which begins in Shrawan, as well as by month. This saves hours at year end.

How software helps

A billing system assigns bill numbers automatically, links each line to staff, records payment mode, applies VAT where configured and produces daily and monthly reports. It also stores customer history, so a returning client does not have to remember what colour she used last time. See the Salon and Spa Software page for details.

Next step

Take yesterday's takings and see whether you can explain each rupee by service, product and payment mode within ten minutes. If not, start with a better bill and a daily closing routine. Message WebsNP on WhatsApp at +977 9846280400, and we will show you a billing screen set up for a parlour like yours.

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