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Basic and Advanced Profit First - the Difference.

September 18, 2018

The Difference Between Basic and Advanced Profit First.

Many customers who have read the book will ask the question, "In the book, it presents both basic and advanced Profit First systems. How are they different an which method is better?

The basic method of Profit First suggests establishing four accounts (Profit, Owner's Pay and Tax) in addition to keeping your current checking account for deposits and to pay bills. If three new accounts feels like to much,, you can start with just two accounts: your current checking 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 ( 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 checks, etc) and has additional accounts, making it very clear what money is available for what purpose.

If you have further questions or want help implementing Profit First in your business, please schedule a time with one of our Certified Profit First Professionals to uncover your businesses profit!

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Profit First Strategies helps business owners experience profit.

Profit First Strategies

Profit First is a system that helps you produce profits in your business the first month and always. Using this approach to running a small business you can make profit a habit and not a remote possibility. The Profit First approach starts by rewriting the usual bookkeeping formula so that profit is taken and put in the bank with every bookkeeping cycle. The system follows through by instilling discipline in your budgeting and cash flow management. Read our articles to learn the basics of Profit First and Profit First Strategies that you can use this approach to make you business more successful and your business life more efficient and easier.
Profit First helps you experience profit.

Ronald B. Allen
CEO, Profit First Professional, Fix This Next Founding Advisor
Principle of an accounting firm that’s committed to educating business owners on their financial health, providing a trans-formative strategy and helping them experience their profit!