Profit First FAQ

A Collection of Profit First Frequently Asked Questions
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Should Your Accounts be Checking or Savings?

Profit First FAQ
July 3, 2018

Which Profit First Accounts Should Be Checking Accounts and Which Ones Should Be Savings Accounts?

Are you confused on how to organize your accounts using the Profit First Method?

It 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.

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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.

Profit First FAQ

A Collection of Profit First Frequently Asked Questions
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!