is important to understand the difference between a checking account and a
savings account. As a general rule, savings accounts yield interest, but are
limited in the number of withdrawals allowed during the statement period. A
checking account typically offers an unlimited number of withdrawals and
checks, but does not yield interest.
Income, Profit, Owner's Comp, Tax, and Operating Expense should all be
set up as checking accounts. The flexibility offered by checking accounts far
outweighs any minuscule interest you get by using savings accounts.
The two "no-temptation" accounts set up at your
secondary bank - Profit Hold and Tax Hold - should be set up as savings
accounts. This is where you will collect interest because your money will
pool for a while.
Still confused? Contact us and let us help you by being your Profit First Professional. Exigo Business Solutions team of Profit First Professionals and Advance Certified QuickBooks ProAdvisors have the knowledge and experience it takes to find the information needed to help you make better business decisions and maximize your profits.
When you are doing lots of business but not seeing more on the bottom line, ask yourself, are your profits in focus? Then consider converting to Profit First.
A penny saved is a penny earned and every dollar you move to a Vault account is safer from being spent unwisely. Put part of your profit allocation in Vault.
Read and understand an example of Real Revenue being used in a business to get a better idea of what it is and why it is so important in the Profit First method.