Financials

What the Financials page answers

Was the business financially healthy this period? The page works top down: what you earned, what it cost to deliver, what you owed regardless, and whether cash went up or down. Every figure follows the date range at the top of the page.

Two numbers do most of the work, and they are not the same thing.

Recognized revenue is what you earned by delivering services, selling retail and charging cancellation or no-show fees, whether or not the client has paid yet. It comes from invoice line items, so tax and tips never enter it.

Payment is not delivery. A service is earned on the day its visit is completed, not the day it was paid for: a treatment paid for on 26 September and performed on 16 October is October revenue, and September shows the $600 as cash. A service that was paid for but has no completed visit in your booking system (no visit linked to the sale, a visit still booked, or one that was cancelled) is not counted as revenue or as delivery cost. It is shown as awaiting a completed visit, with its amount, so nothing disappears. A retail product is earned on its sale and a cancellation or no-show fee when it is charged. A refund comes off revenue in the period it happens, and the refunded visit stays in the period it was delivered, so a month in which refunds exceed sales can show negative revenue; its margins then show as not available. Gift card, membership, and package sales are excluded until the client redeems them, because selling a gift card is not the same as earning the money.

Cash collected is what actually arrived: payments received in the period, by the day they were made, less refunds paid. It includes what clients paid for gift cards, packages and memberships, because that cash is in the bank, and it excludes credits redeemed against an invoice, because that cash arrived when the credit was bought. A gift card's cash is what was paid for it, so a promotional card that nobody paid for adds no cash.

A client who buys a $250 gift card on the same ticket as a $900 treatment produces $1,150 of cash collected and $900 of recognized revenue. The gift card becomes revenue later, when someone uses it.

The two kinds of cost

Nabu splits cost by one question: do you owe it if nobody books today?

Variable delivery costs exist only because a service sold. Products and consumables, provider commission, flat per service pay, per unit injectable pay, and card processing and financing fees. Stop selling and these stop.

Product cost comes from what you set up: each service's products at their cost, or a manual product cost per service, and for retail, the cost of the product sold. When that setup is missing for something you sold, its product cost is missing rather than zero, and a banner names the services and the retail it affects, because contribution reads high until it is filled in.

A fully refunded visit is included here, in the period it was delivered, together with its revenue. The refund comes off revenue in the period you gave the money back; the product and the provider's hour were spent either way.

Cost follows the treatment, not the payment. A service is costed when it was performed: a package session, a gift card redemption and a visit a member used a membership benefit for are all costed, even though the membership visit's revenue is not measured yet. Selling a package, a membership or a gift card costs nothing until the service it pays for is delivered. Performed services that brought in no revenue in the period are counted separately, so the contribution profit on this page equals the Cost Center's and adds up from the service figures on Profitability plus retail, fees, other sales and refunds.

Fixed costs are committed. Provider base payroll, support and overhead, rent, equipment, and marketing. The bill arrives whether the schedule is full or empty. Each is charged for the days it was in place: a monthly cost is its full amount in any full calendar month, and a cost, provider or device you retire mid-month is charged up to the day you retired it. A one-time cost belongs to the month it happened, and Nabu does not yet record that date, so it is not placed in any month: the page names your one-time costs and their total instead of spreading them over twelve months, and the months they belong to read better than they were until the date is recorded. What a cost is treated as depends on its category, not its name, so an owner draw or a loan payment counts as non-operating only when it is categorized that way.

Two costs are easy to get wrong here, and both are counted exactly once.

Equipment is fixed. A laser lease costs the same in a quiet month. The page shows how much device time was consumed by delivered services, but that figure is an allocation of the lease you already paid, not a second cost.

Provider base pay is fixed too, for hourly and salaried providers alike. An hourly provider is paid for every rostered hour, not only the hours a client was in the chair. Commission, flat fees, and per unit pay are variable, because those only exist when a service sells. See People & Payroll for how each arrangement is set up.

Profit bridge

The bridge is the profit and loss statement in five lines.

Recognized revenue
  less variable delivery costs
= Contribution profit
  less fixed costs
= Net profit

Contribution profit is what each sale leaves behind before any commitment is paid. Contribution margin is that figure over recognized revenue. Because it deducts variable cost only, it sits well above net margin, often around 70% for a medspa.

Net profit is what remains after commitments. Debt service and owner draw are not in it. Loan principal and owner distributions are real money leaving the bank, but they are not costs of operating the clinic, so they appear in Cash Flow Snapshot instead.

Below the bridge, a panel called "Reached delivered services" shows how much committed provider pay and equipment time was consumed by work that actually happened. These are allocations of cost already counted above, so they are never subtracted again. The gap between committed provider pay and the part that reached a service is the cost of unfilled capacity.

Break-even

Break-even revenue is fixed cost divided by contribution margin.

If you carry $130,000 of committed cost and keep 70 cents of each revenue dollar after delivery, you need about $186,000 of recognized revenue to cover it. Revenue still needed is that target less what you earned.

Revenue still needed is usually larger than the net loss, and the page says so. A $16,000 loss at a 70% margin takes about $23,000 of new revenue to close, because only 70 cents of each new dollar helps.

Additional visits needed converts the gap at your average ticket: each is one more revenue-generating invoice, which can carry more than one service. The real number depends on which services get booked, since a high contribution service closes the gap faster than an average one.

Once you are above break-even the card switches to the cushion instead of the gap. Margin of safety is how far revenue could fall before the period stops covering its committed cost. A thin margin means one slow month tips you into a loss.

Cash break-even appears when there is debt service or an owner draw. It covers those too, so it answers what you must collect for the bank balance to hold steady.

When variable cost is at or above the average ticket, no break-even exists. More volume would deepen the loss. The page says that instead of printing a revenue target that would make things worse.

Revenue quality

This card explains the gap between cash received and revenue earned.

Unearned cash held, the gift card liability and the package liability show as Not available. They need each card's and package's remaining balance after redemptions, and the connected records carry the amount each was sold for without being drawn down as clients use them. A figure read from those records would be lifetime sales, not what you still owe, so Nabu shows Not available instead. Gift cards sold (what was paid for them this period) and gift cards redeemed (gift card balance used at checkout this period) are shown as activity. The Healthy, Watch, and Risk badge judges refunds and discounts. Discounts are the ones recorded on the sale lines; if an older invoice carries a discount its lines do not, the discount figures show as not available rather than guessed.

Accounts receivable is earned work not yet paid for, before tax, at the end of the period. It is a balance: a service delivered last month and still unpaid is still owed at the end of this one. What an unpaid invoice still owes is split by what it is made of. Only the earned part is the receivable; the unpaid part of a package, gift card or membership sale, and unpaid tax and tips, are shown beside it, because they are owed but are not revenue you earned.

Booked but not delivered is the value of appointments on the calendar for the next 31 days. It is a pipeline figure as of today, so it is hidden for a closed period, where a snapshot taken today says nothing about what happened then.

Membership obligation is not calculated. Nabu records membership dues collected and membership credit used, and both appear in the reconciliation. The amount still owed to members needs each member's remaining benefit balance and an agreed rule for valuing it, so the card says so instead of printing a figure.

Refunds reduce revenue in the period the refund happens and reduce cash by the amount returned. Both need the refunded amount, so Nabu records it on the invoice. A refund only reduces revenue that was earned: money handed back for a treatment that never happened returns cash and reverses nothing. If your records hold no date for a refund, Nabu cannot place it in any period, so it is not deducted anywhere and the page says so, rather than guessing that it happened on the sale's date.

For a full refund the whole invoice reverses, so the cash returned is what was settled on it. The invoice total is not used: it carries tax and tips that were never your revenue, and an invoice can be settled for less than its face value.

For a partial refund, if the amount is recorded Nabu deducts its revenue share from revenue (the part of the refund that was tax, or the value of a gift card or package sold on the same ticket, was never revenue) and returns the full amount in the cash statement. If it is not recorded, the source data says a refund happened but not how much, and there is no defensible way to estimate that from a status flag. Nabu books nothing and says the amount is unknown, because an estimate nobody can tie to a transaction is worse than a missing number.

Memberships

This card counts client memberships for the selected period. The numbers come from each client's membership and its recorded history, whether you entered it in Setup, imported it, or your connected system sent it. Billing lines are never counted as members. Memberships explains every figure in more detail, with common questions.

Active Members is the number of clients holding at least one membership that is active, frozen or past due at the end of the period. A client with two plans is one member. A suspended membership, for example one your system suspended after a dues payment failed, is still in force but is not counted as active. The card shows them separately as Suspended.

New Members is the number of clients whose first membership began in the period. A renewal, or a second plan for an existing member, is not a new member.

Cancelled is the number of memberships cancelled in the period. A cancellation request is shown separately, because a request is not a cancellation until the membership ends.

Member Churn counts clients, and has its own place on the card. Take the clients holding a membership that is active, frozen, past due or suspended at the start of the period. Member Churn is the share of them holding none at its end, shown with how many of them left. A member who switches to another plan has not churned, and a membership that expires counts as well as one that is cancelled. Cancelled and Member Churn are separate figures: several cancellations can mean no churn at all when the clients moved to other plans.

Recurring Billing is what the memberships in force bill while their dues are being collected, as a monthly equivalent of each plan's price and billing cadence. A membership whose dues are waived, frozen, suspended or stopped adds nothing. It is a run rate, not revenue earned in the period. The card shows it only when Nabu can state it completely. When your data can't support it, the figure is left off the card rather than shown as Not available, and Ask Nabu can tell you why.

Each figure shows as Not available, with the reason, when the membership data cannot support it. For example, if your connected system sends a membership status Nabu has not confirmed, member counts wait until it is confirmed, and they wait again if the system's status codes change after that. Recurring Billing needs to know whether each membership in force is being collected, and a price and billing cadence on every plan in use; until it has them, the card leaves it off. Nabu does not fill the gap with an estimate. Membership dues collected and membership credit used for the period are on the reconciliation.

Cash flow snapshot

Cash in is every payment received in the period, including payments for gift cards, packages and memberships. Cash out is every real outflow: variable delivery costs, committed costs, debt service, owner draw, and refunds issued.

Cash out is larger than the cost base behind net profit, for two reasons that run in opposite directions. Debt service and owner draw leave the bank without being operating expenses. Non cash marketing does the reverse, since comped product is an expense in the profit bridge that never left the account.

Enter a cash balance to see runway. Nabu normalizes the period's net burn to a 30 day rate over the days that have happened, so runway is comparable whether you are looking at a week or a quarter, and a month in progress is not read as a slower burn. A period where cash grew shows no runway, because there is nothing being burned down.

Monthly trends

Two charts, both on a single axis so the marks are comparable.

Revenue, cash, and profit plots recognized revenue as bars with cash collected and net profit as lines. Revenue and cash separate when clients prepay or redeem old credits. Net profit sits below both because it carries the full committed cost base for the month, which does not shrink when a month is quiet.

Months before the location's first invoice show no profit line. The clinic was not trading, so it did not lose its cost base.

Margin leakage plots contribution margin, fees, and discounts as percentages. A month with rising revenue can still be a weaker month if the fee and discount lines climb faster than the margin line.

Unit economics

Two costing bases, stated once each and never mixed.

Contribution figures use variable delivery cost only, so they tie exactly to the profit bridge. Average contribution per service is service revenue less the products, variable pay, and fees on it.

After overhead figures add each service's share of committed provider pay, equipment time, rent, and general overhead. This is allocation analysis for comparing services against each other. It is not a second deduction from profit, and the page says so.

Fixed cost summary and expense breakdown

Expense breakdown ranks committed costs for the period against the comparable period before it. The comparison measures whether the commitment itself changed, so a cost you have not touched reports exactly zero whatever date range you pick. A genuine change still shows: a campaign that started two days before the period ended reports the two days it ran.

The summary card turns the same total into per day, per open hour, and per treatment room figures, plus a coverage ratio. Coverage is contribution profit divided by fixed costs. Exactly 1.00x is break-even. Below that the period lost money.

Fixed cost ratio has one reference across the whole page: below 60% is comfortable for a medspa, and above 75% the location is carrying more capacity than its current volume supports.

Financial ratios

Each ratio divides a cost or profit measure by recognized revenue. Bands come from the same medspa reference set the Cost Center uses, so a location is never called healthy on one page and critical on another.

Payroll ratio counts every form of pay once: committed provider base pay, variable provider pay, and support and admin payroll. The cash-to-revenue ratio divides cash collected by recognized revenue, and near 100% is the healthy state. Meaningfully above it means cash is arriving for work not yet delivered, which is an obligation rather than an achievement. It is not the operating collection rate on Forecasting, which takes out cash from gift card, package and membership sales first.

Data findings

Banners appear at the top of the page when something changes how the numbers should be read. Missing scheduled hours on a provider, partially refunded invoices, payment methods with no fee rule, and costs that look recorded twice all surface here.

Four banners are worth knowing about before you read anything else.

If variable delivery cost comes out higher than revenue, that is a setup error rather than a margin problem: delivering a service cannot cost several times what it sells for. The usual cause is a product mapped per service unit instead of per service, which multiplies its cost by however many units the treatment sold. Contribution margin, break-even and net profit are all wrong until it is fixed.

If your date range runs past today, only the days that have actually happened are counted, on both sides. Revenue, committed costs and goals all cover the same elapsed span, so net profit stays a fair comparison rather than charging you future rent against revenue you have not earned yet. Nothing is projected forward.

Retail commission is paid to whoever sold the product: the provider named on the sale, or otherwise the provider who performed a service on the same ticket, which is how it works at the counter when the client buys skincare after their treatment. A retail line with no provider anywhere has no seller to pay, so that commission is missing and the banner names the amount.

Service commission and per-service pay follow each provider's pay settings, and are owed to whoever performed the service: the provider on the visit, or the provider named on the sale when there was no visit. When a service had no provider, or its provider's pay is not set up, that pay is missing rather than zero, and a banner says how much revenue it affects.

The second concerns your date range. If part of your date range falls before the location's first invoice, those days carry committed cost and no revenue. A year to date view on a clinic that opened in April will show a fixed cost ratio, break-even target, and net margin set largely by the months it was not trading. The banner names how many days and what share of the fixed cost they account for. Narrow the range to the months you were open to see how the clinic is performing now.

The duplicate warnings matter most. Nothing stops a device being entered as both a fixed cost row and an item in the equipment register, or front desk pay existing as both a Payroll cost row and staff records. When Nabu sees both, it names the amount at risk rather than quietly adding a commitment to itself.

Why numbers might differ from your accountant

Nabu reports on the operating economics of a location. An accountant's income statement includes items Nabu deliberately leaves out of profit, such as depreciation, income tax, and interest classification. Debt principal and owner distributions sit outside profit here by design.

The figures reconcile to each other. Every card, bridge row, ratio, cash flow line, and break-even figure derives from one definition of period operating cost, and all of them are computed in a single pass so no card can be showing you a staler answer than the card beside it. The page checks both that the model ties out and that the cards agree with each other before rendering. If either fails, a red banner says so instead of showing you numbers that disagree.

Frequently asked questions

How are payment fees worked out? A fee is charged on money that moved through a processor. Redeeming a gift card, package, or membership credit does not move money, it reduces what is left to collect on the ticket, so it attracts no fee. Buying that credit did move money, and that is when the fee was earned.

On a $200 ticket settled with $100 of gift card credit and $100 on a card, the fee applies to the card half only. Selling a $100 gift card on a card earns a fee on the $100.

The fee is then spread across every line on the ticket by revenue share for per-service costing, and the period total is taken per invoice so none of it is lost.

A fee rule set to apply to the pre-tax amount charges on the part of the payment that was not sales tax, and no rule charges on a tip. The same calculation runs on Cost Center, Profitability and the Payment Fees setup page, so a service's fee is the same figure everywhere.

My retail margin looks lower than before. Retail commission is now costed against the provider who sold it. It was previously configured and owed but absent from cost, which made retail look more profitable than it was.

Why is contribution margin so much higher than it used to be? Contribution now deducts variable delivery costs only. Provider base pay and equipment moved to fixed costs, where they belong, because you owe them whether or not a client books. Net profit is unaffected by where a cost sits, but contribution margin rises and fixed cost ratio rises with it.

Why does the page show a loss when my bank balance went up? Cash and profit answer different questions. Cash can rise on gift card and package sales for work you have not delivered yet. Net profit only counts revenue you earned.

Cash collected does not match my bank deposit. Processing fees are usually netted before funds land, transfers take a day or two, and Nabu reports the gross amount collected. Your bank shows what was deposited after fees.

My provider payroll looks higher than I expected. Hourly providers are costed on rostered hours, not chair time. Check the paid hours per week figure in People & Payroll against what their payslip actually says.

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