In the book, it presents both basic and advanced Profit First systems. How are they different and which method is better?
By Profit First Accounting in 28 May 2024 | 05:22 pm
The basic method of Profit First suggests establishing four accounts (Profit, Owner’s Pay and Tax) in addition to keeping your current everyday account for deposits and to pay bills. If three new accounts feels like too much, you
can start with just two accounts: your current everyday account and add a Profit account. This basic method is a good way to “ease” into Profit First.
The advanced method of Profit First suggests establishing minimally five accounts: Income, Profit, Owner’s Pay, Tax and Operating Expenses. Additional accounts are suggested for specific needs (e.g. Payroll account for employees, a Drip account for distributing income over time, etc.).
The advanced method is the superior approach since it separates deposits from any outbound cash flow (writing cheques, etc.) and has additional accounts, making it very clear what money is available for what purpose.
Login to reply
Please login to reply to this topic
Report
Transform Your Finances with Our Upcoming Programs!
Take charge of your financial future with our two exciting upcoming programs designed to guide you on the path to financial freedom! Couples Money Mentoring Program Designed for couples looking to get on the same page with their finances, this program will help you build financial harmony and create a sustainable financial plan. Special Offer: The first 5 couples to enroll will receive a $300 discount, bringing the total cost to $2,200 including GST. Don't miss this limited offer! 12-Month Profit First Group Coaching A comprehensive 12-month program focused on transforming your business into a profit-generating machine. Choose from our Monthly or Weekly Payment Plans and start mastering your finances with structured, small group coaching, and personalized support. Ready to make a change? Join the waitlist!