Bookkeeping for Santa Monica businesses

Short answer: A bookkeeper for Santa Monica businesses closes the books monthly and tracks revenue earned in Santa Monica apart from revenue earned elsewhere. Santa Monica is its own city, and its business license tax is figured on Santa Monica gross receipts for the prior calendar year. Clean, split revenue makes the summer renewal simple.

A beach city with a serious business base

Santa Monica is a compact city with a lot of business in it. Visitors keep the hotels, restaurants and shops near the beach, the Pier and the Third Street Promenade busy most of the year. Main Street and Montana Avenue have boutiques, cafes, salons and fitness studios. Office buildings hold agencies, media and software companies, investment and law firms. Medical and wellness practices fill a good share of the smaller buildings.

Many of these businesses earn money in more than one place: a studio that also films in Burbank, an agency with clients across the country, a retailer that ships online orders out of state. That is where Santa Monica bookkeeping gets specific.

How the Santa Monica license tax works

Anyone who conducts business in Santa Monica, or whose business is based there, needs a City of Santa Monica business license. The tax for most businesses is a flat minimum on a first tier of gross receipts, plus a percentage of Santa Monica gross receipts above that tier. The percentage depends on the business classification the city assigns you.

Renewals are due July 1 and use gross receipts from the calendar year before. The city applies penalties to renewals made after August 31. There is a small business exemption for businesses under a worldwide gross receipts threshold, and some renewals also carry regulatory permit fees or business improvement district assessments, which the city prints on the renewal form.

Rates, the exemption threshold and your classification change over time. Check the City of Santa Monica Business License office before you file.

Why the words Santa Monica gross receipts matter

The tax is on Santa Monica gross receipts, not on every dollar a company earns. If your books show one total revenue line, someone has to dig through invoices every summer to work out which part belongs to Santa Monica. If the books already split revenue by location or by where the work happened, the figure is one report.

So we set up the chart of accounts, classes or tracking categories to match how your CPA wants to apportion revenue. A shop with one Santa Monica storefront and a web store gets two revenue streams. An agency with an office here and clients everywhere gets revenue tagged by client and location. Your CPA decides how the rules apply; we make sure the numbers are ready.

Where Santa Monica books go wrong

• Revenue split by location or channel so the city figure comes straight from the books.
• Class packs, memberships and retainers recorded as earned, not when the card was charged.
• Hotel and restaurant sales matched to the point of sale, with tips kept out of revenue.
• Startup closes that finish early enough for an investor update.
• Contractor payments organized for 1099s and payroll booked by department.
• Each city's license fees and assessments coded so your CPA can find them.

What Santa Monica owners ask us for

• Xero bookkeeping: Tracking categories in Xero can tag every sale by location or channel. The Santa Monica gross receipts figure for the July renewal then comes from one report.
• Ecommerce bookkeeping: A Main Street boutique that also ships web orders out of state needs storefront and online revenue recorded as separate streams, with platform fees and refunds shown on their own lines.
• Bookkeeping cleanup: Studios that booked class packs and memberships as income on the day of the charge get their past months corrected to unearned revenue, so slow months stop looking like losses.

A typical cleanup: the studio that sold summer in January

A fitness studio near Main Street sells ten-class packs and monthly memberships through its booking software. Every sale is recorded as income the day the card is charged. A big New Year promotion makes January look like the best month in years, and the slow, expensive months that follow look like losses. Instructors are paid from a separate account, some as employees and some as contractors, with no clear list of who is which.

We set up unearned revenue for packs that have not been used and move it into income as classes are taken, using the booking software's reports. Instructor pay is split into payroll and contractor accounts, with a vendor list ready for 1099s. The owner sees real monthly margin, and the Santa Monica revenue figure for the renewal matches what the studio actually earned in that calendar year.

Getting started

1. Call We ask where you earn revenue, what software you use and when your renewal or tax deadline falls.
2. Set up Bank, card, booking and payroll data flow into your books in QuickBooks, Xero and more, with revenue tagged by location.
3. Clean up Earlier months are corrected so the prior calendar year is ready for the city and your CPA.
4. Close Every month you get reconciled reports and a brief list of open questions.

Bookkeeping services in Santa Monica

• Bookkeeping cleanupWhen the books exist but nobody trusts them, cleanup finds what went wrong and fixes it at the source.
• Catch-up bookkeepingMonths behind, or a full year, the missing months get entered and reconciled from your statements.
• Emergency bookkeepingA deadline that will not move and books that are not ready. Here is how the work gets ordered.
• Monthly bookkeepingEvery month categorized, reconciled and closed, so the numbers you look at are numbers you can trust.
• QuickBooks cleanupA QuickBooks file that no longer matches the bank, fixed account by account and month by month.
• QuickBooks bookkeepingQuickBooks Online kept the way it was meant to be used, so the reports it gives you are right.

Santa Monica in detail

• Restaurants in Santa MonicaSanta Monica taxes local receipts, sets its own minimum wage and controls service charges. The books should reflect all three.

Nearby in Westside

• West Los Angeles

Questions