February 12, 2020

What Is a Profit First Professional?

Profit First Methodology
Ronald B. Allen

A Profit First Professional belongs to an exclusive group of highly-trained and certified professionals. These accountants, bookkeepers, and business coaches are trusted business advisors who provide strategic assistance as an integral part of their services. The overriding goal of a Profit First Professional is to maximize the profits of their clients through the application of a unique bookkeeping and business approach. Businesses that work with a Profit First Professional begin by realizing a profit in their business from the very start. Then, they learn and exercise financial discipline and cash management that ensures ongoing profits and business success. So, what is a Profit First Professional? He or she is your best friend and most trusted advisor on the pathway to business success and maximized profits!

Is a Profit First Professional Different from a Bookkeeper or Accountant?

All Profit First Professionals are accountants or bookkeepers, and, sometimes, business coaches. As the top accounting firm in the Kansas City area, Exigo Business Solutions will do your accounting and bookkeeping as well as your income tax preparation and planning in any of the 50 states. We routinely do accounts payable, accounts receivable, account reconciliation, financial statements, payroll services, and financial forecasting and analysis. With a basic four-part approach, we assess your needs, develop a strategy, implement any and all accounting processes needed, and work with you to maintain an effective accounting system. And, as Profit First Professionals we can do a lot more! With skilled Profit First Professionals like Exigo Business Solutions, you start with good, solid accounting and then you get a lot more.

How Does Profit First Work?

The best way to understand how Profit First works and why it works so well is to realize that it is an active instead of a passive approach to doing your books. We often note that you can outsource your accounting and it can pay for itself. Your business needs competent bookkeeping that is current and gets the numbers right. But, it needs more. Businesses, all too often, have hidden costs that constantly leach money and erode profits. When you follow the traditional “passive” approach to doing your books you are using “generally accepted accounting principles” or GAAP. And you are passively accepting poor profits or none at all and missing those hidden costs.

Profit First Professionals start by assuming that you deserve a profit for your work! After all, that is why you went into business! It makes a big difference that you start out this way. Here is how and why.

The Profit First Bookkeeping Formula

GAAP says that income minus expenses equal profit but Profit First says that income minus profit equals expenses.

When you start out, the numbers are the same. But, the approach makes all of the difference in the world.

Income minus Profit = Expenses

Allocating to Profit First Bank Accounts

The Profit First Method starts by creating separate bank accounts for profit, owner’s pay, operating expenses, taxes, and other items as needed. When you work with the Profit First Professionals at Exigo Business Solutions we will help you set this up. Then you will allocate money to these accounts twice a month. This takes care of the first part. You are banking a profit as soon as you start using this approach.

Profit First Financial Discipline

At this point in the discussion, many business owners note that changing the bookkeeping formula does not create new money. And, that is correct. The Profit First method starts you off by putting your profit first. To keep that profit, you need to look at your cash flow, get a handle on budgeting, and remove the leeches that have been sucking away at your profit. It is no coincidence that the best Profit First Professionals are excellent accountants! It is all too easy to have your books done and to think that everything is fine with your business when, in fact, there are problems. As the world of business becomes more complex, costs become hidden and opportunities are overlooked in columns and columns of figures.

Top-Notch Accounting and Business Intelligence Solutions Maximize Profits

At Exigo Business Solutions, we use accounting software like QuickBooks. This is the best small and medium-sized business software. QuickBooks custom reports are a great tool for ferreting hidden problems in your business. For companies that have multiple locations and for those that work in the high-tech sector, we also use Gravity Software. These are impressive accounting tools that help you control your finances, stay on top of cash flow, and maximize profits. And, as necessary, you can integrate business intelligence solutions like QQube, QBAR, Microsoft Power BI, or Power Pivot. With an intelligent approach to doing your books, you will accomplish the second part of the Profit First goal, solidifying your profits and then maximizing them!

What Is a Profit First Professional?

This brings us back to the beginning. What is a Profit First Professional? This is someone you will work with you to start taking the profit that you deserve. The Profit First Professional is who will help you take charge of your finances instead of letting your finances take charge of you. And, this is the professional who, like the folks at Exigo Business Solutions in the Kansas City area, who will make your profits their passion.

Although the idea behind a business is usually simple (like make and sell widgets), the devil is always in the details. And, the details can be the very devil to stay on top of. Most business owners are not skilled accountants. They spend their time dealing with their products and services, managing staff, and doing all of the many things that make a business run. The point of having your books done is not just to be ready for taxes and do payroll. Good accounting gives you the insights you need, spots the necessary details, and integrates the information in such a way as to create actionable reports. The Profit First Professional is the skilled professional, trusted adviser, and reservoir of knowledge that you need to make your business the best that it can be.

For more information about how a profit first professional can help your business, contact us at Exigo Business Solutions in the Kansas City area.

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