YNAB For Small Business [Profit First Accounting]

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5 жыл бұрын

Small business budgeting can be an absolute nightmare, but it doesn't have to be that way. When you combine Profit First with YNAB, you can build a budget the gives you complete freedom, increases profit, and reduces your stress.
Download the Profit First Checklist: mappedoutmoney.com/profit-chec...
Buy the book here (affiliate link): amzn.to/2XNtA0Q
About a year and a half ago, my friend Desirae from HalfBanked told me about a book called Profit First by Mike Michalowicz. It's a budgeting method, but for your business.
I immediately ordered it, blew through the book in a couple of days, and then set up the system for my business.
IT. HAS. BEEN. AMAZING.
Since implementing profit first, we have:
+ Dramatically increased our business profit
+ Significantly reduced our stress
+ Started to treat ourselves like employees with regular salaries
+ Always paid taxes on time without worrying
The underlying premise of the book is based on changing the equation for how we calculation profit. Instead of Sales - Expenses = Profit, Mike Michalowicz turns this equation around to where Sales - Profit = Expenses.
When you change the equation, you force yourself to save at the outset and then live on what is leftover. Profit First helps you build a lean business without unnecessary expenses.
A few weeks ago, I published a video with an overview of the Profit First system, and today I'm sharing how to set it up inside of YNAB (You Need A Budget).
If you run a small business and want to budget with YNAB, this is the video for you.
Below you'll find everything we cover plus the quick jump sections for easy access:
0:50 Disclaimers + Pre-reqs
2:20 Profit First Setup Before YNAB
3:35 Adding Profit First Accounts in YNAB
6:30 Separating Business and Personal Accounts
7:05 Setting Up YNAB Budget Categories
16:40 Mention of Toolkit for YNAB
21:00 The Daily Profit First Routine
23:08 The Bi-Weekly Profit First Routine
28:55 The Quarterly Profit First Routine
31:10 Simplicity Vs. Complexity And Starting Out
33:35 How To Pay Yourself With Irregular Income
36:25 Download The Profit First Routines Checklist
______________________________
My Website: mappedoutmoney.com/
Intro by: Ant Bandit / antbandit
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Twitter: / nickdtrue
PS: If you have an Amazon Alexa, I just launched a brand new daily flash briefing called 30 Second Money. It would mean the world to me if you checked it out in your Alexa app.
www.amazon.com/Thirty-Second-...

Пікірлер: 146

@mappedoutmoney 5 жыл бұрын

Download the Profit First Checklist: mappedoutmoney.com/profit-checklist/ And here's the Quick Jump Sections for this video 0:50 Disclaimers + Pre-reqs 2:20 Profit First Setup Before YNAB 3:35 Adding Profit First Accounts in YNAB 6:30 Separating Business and Personal Accounts 7:05 Setting Up YNAB Budget Categories 16:40 Mention of Toolkit for YNAB 21:00 The Daily Profit First Routine 23:08 The Bi-Weekly Profit First Routine 28:55 The Quarterly Profit First Routine 31:10 Simplicity Vs. Complexity And Starting Out 33:35 How To Pay Yourself With Irregular Income 36:25 Download The Profit First Routines Checklist

@lovelyshermane8814 2 жыл бұрын

My life in business would be so different head eye ran across you before now. Thank you for this

@CaracalKeithrafferty 3 жыл бұрын

I can't thank you enough Nick. You introduced me to YNAB months ago, and only 2 months ago I read Profit First and started creating my own business. This video is a godsend, because it's creating an all-in-one super-granular solution, saving me all the time of having to learn a new system like Wave. You rock man, thank you again.

@byamberkri 5 жыл бұрын

Thank you so much for this!!!! I have been trying for nearly a year to get these things to work together but couldn't wrap my head around it. Your videos make such a huge difference and I can't thank you enough! ❤

@mappedoutmoney 4 жыл бұрын

Hey thanks, Amber! Super glad that the video was helpful for you :)

@burneychoo 4 жыл бұрын

Hey Nick. Thanks for a great and useful video. I am OCD when it comes to setting up systems like YNAB, down to the way I name my accounts. You are one of those rare few my OCD side gives raving approval to....

@mackenzielester2631 3 жыл бұрын

Thank you so much for your video and clear explanation. I'm a small business owner and I'm going to try the set owner's comp for August and see how that goes for my personal budget. Great concept.

@KaleGood 4 жыл бұрын

The schedule C has a place where you can put in your own categories for expenses. I have my ynab setup so that I have a "Standard Expenses" category (with IRS schedule C standards) and a "Custom Expenses" category (with expenses common in my industry). At tax time, the custom expenses just go into the spaces that the Schedule C allows for this sort of thing. I was told by the accountant I used once that having custom categories is a bit of an audit-deterrent, because it shows a high level of diligence in bookkeeping.

@karijames381 5 жыл бұрын

if I ever start a business i know what podcasts I am going to be re-watching! what an asset and wealth of knowledge your podcast are! as always great job.

@mappedoutmoney 5 жыл бұрын

Thanks Kari! That means a ton to me. I'm so glad you feel that way :) Really appreciate you always showing support!

@JenGrice 4 жыл бұрын

Great advice!! I use both Profit First and YNAB too (as an author and coach)... but I just use one business account instead of all the individual accounts as Jesse suggests. It was Profit First Expert and coach Amber Dugger who taught me her system. YNAB makes it easy to keep the money divided and saved for profit and taxes.

@jacqui8314 5 жыл бұрын

Awesome video! I can’t wait to watch it again, take notes (numbers hurt my brain, lol), and implement it in my business. I appreciate your clear, easy-to-understand instructions, Nick.

@mappedoutmoney 5 жыл бұрын

Hahah thanks Jacqui! Really glad to hear that it was helpful. :)

@Healthhomehappy 3 жыл бұрын

You have everything! Great job! I've been using PF for a year, excited to add YNAB to it.

@mappedoutmoney 3 жыл бұрын

Awesome! I love PF. So glad you like it too :)

@PidasianHippie 5 жыл бұрын

Great information Nick. If/when I ever start a business or side hustle, I will definitely use this system in some form or fashion.

@mappedoutmoney 5 жыл бұрын

Thanks! Glad that you enjoyed it even though you don't have a business or side hustle yet. As always, really appreciate you watching!

@martinfarrow2825 5 жыл бұрын

Been waiting for this will watch later 👍

@mappedoutmoney 5 жыл бұрын

Awesome Martin! Can’t wait to hear what you think. Hope it helps!

@Sashin9000 2 жыл бұрын

I love your shirt man!

@mappedoutmoney 2 жыл бұрын

Hey thanks!

@rhondaarnold6809 4 жыл бұрын

I have been looking for a system/strategy like this forever for my salon! Actually since Covid-19 gave me a paid holiday... in which I'm going to whip my business budget into shape! Hopefully to hit the ground running with a revamped price list , which I've been guessing at for 13 years! Now just need some income to get this rolling! LOVE YNAB and your great tips Nick! Thank you!

@mappedoutmoney 4 жыл бұрын

Awesome Rhonda! So glad this was helpful for you :) Glad you’re taking this opportunity to go on the offensive with your business budget. Good luck and reach out if there’s ever anything I can do to help! Nick

@dric30 2 жыл бұрын

Awesome content Nick! All signal here…a PFA disciple ! Q. How does a S- Corp play into profit first accting

@willingwinning 3 жыл бұрын

Thanks for sharing, Nick!

@mappedoutmoney 3 жыл бұрын

Thanks for watching!

@MissVindicat 4 жыл бұрын

This is very helpful. Thank you. Love the idea of a set salary.

@mappedoutmoney 4 жыл бұрын

Hey! Glad this helped. Yes, putting myself on a set salary was one of the best things we've done with the business.

@paulmanili2033 3 жыл бұрын

This was great, thank you.

@mappedoutmoney 3 жыл бұрын

No problem!

@candaceklixbull407 4 жыл бұрын

Hi Nick! Thank you for these videos! They are so helpful. I’ve used QuickBooks for our small business for many years but love YNAB for personal. How do you handle payroll and quarterly taxes? Those are things I feel like I need QuickBooks for...

4 жыл бұрын

gracias por compartir nick! sos una maquina

@mappedoutmoney 4 жыл бұрын

Hola gracias Hugo! Realmente lo aprecio, y me alegra que el video haya ayudado. Además, utilicé Google Translate para esto, así que disculpe si está mal :)

@jonprue 4 жыл бұрын

Bro you have some seriously great content. We have used YNAB for years and implemented profit first a few months ago all while on an irregular income. This has been extremely helpful. Thanks from my family to yours 💪

@mappedoutmoney 4 жыл бұрын

Hey thanks Jon! I super appreciate that man. Really, it means a ton to hear when content is helpful. Thanks for taking the time to write this. Keep on profiting first and YNABing my friend!

@jonprue 4 жыл бұрын

@@mappedoutmoney Absolutely man! My wife and I are watching this together on our budget date. She loves it too! Will email you if we need coaching in the future!

@mappedoutmoney 4 жыл бұрын

@@jonprue Sounds great, glad to hear y'all are working together on it. Have fun YNABing!

@CreeksideSimplicity 4 жыл бұрын

Hi Nick! I'm just discovering your wealth of resources here and I'm excited to watch more videos. I wondered if you could answer a quick question for me. I've just started with YNAB last month (for personal and business). For my business budget, would you recommend back-dating it to January 1 so I have a full year's accounting in one place? I know that's not recommended for the personal budget but wondering if it makes sense for business. Thanks!!

@yayaglass 4 жыл бұрын

I found you yesterday, while in a state of total confusion about how I was going to run my new business. It was a bonus to see that you are a Nomad, which I will be next year!! I've watched several of your YNAB vids, and I completely understand this program, IN A DAY!! Whew!! I will set up a Personal and Business YNAB the minute I'm ready to begin my business, before I spend a penny on Fees, etc. It's going to make my life so much easier! I do wonder if when I subscribe to YNAB it can set up both accounts or will I need 2 subscriptions, one for Personal and one for Business? Well, I can find that out by digging into the YNAB website. Thanks for explaining this process, I appreceiate it more than I can tell you!! Karen

@mappedoutmoney 4 жыл бұрын

Nope! You only need 1 subscription to have multiple budgets. No need for two :)

@Izzybella89 3 ай бұрын

Hi Thanks Nick for all of your videos! Something happened to my budget where I can't seem to match up my accounts to what is in my actual budget across the categories - income, profit, tax, owners comp & opex. I remember there being something you mentioned regarding doing a reconciliation to make sure that the same amount that is in the account is the same as what we budgeted. Can you provide me some info on this? Thank you!

@kaleem_ngo 4 жыл бұрын

Shout out from from Saudi Arabia - your videos impacted my personal and business life (defintley I will sign for a 1-1 ynab coaching)!

@mappedoutmoney 4 жыл бұрын

Hey thanks Rakan! So glad that the videos have been helpful for you and your business. Super excited for you, and yes, definitely reach out if I can help :)

@correll26 2 жыл бұрын

Nick this video helped me to get set up with the PF system for business in a separate YNAB budget. It was an eye-opener ... I saw afterward that a business I started in February really wasn't profitable until November! Question for you - I see that you have a travel line in your OPEX. How would you suggest handling the mileage deduction for personal car travel for business? Should I cut a check to our household monthly based on the number of business miles driven?

@elizabethhenningsen686 4 жыл бұрын

I just started reading Profit first for business and super excited that I can now use YNAB with its as I'm setting it up for my personal finance. My question is this....I love the idea of having both my personal and business budgets in one place. Do you find that the YNAB software makes doing your taxes doable as everything is in a "category"? Like can I dump quickbooks and just use YNAB? 😂. But seriously thank you so much for all of your videos!!! I tried YNAB once before and it was not as easy as I thought it would be and your videos have been a saving grace!!!

@KaleGood 4 жыл бұрын

I like the general idea of this; especially helpful is the chart presented in the previous video. A few questions: As I understand it, you've seen your profit grow; is that just because you're putting money into a "Profits" account (so you see it grow because you didn't have one before)? Could you also say "I've seen my business rainy-day fund grow"? Or has this system helped your revenue grow as well? In the previous video, you mentioned it's helped you make decisions about how to invest in the business: how so? Just by cutting unnecessary expenses?

@shaunnichols8170 3 жыл бұрын

Thanks for this! One question I had is what do you do with the profit base section? It's unclear to me what the job of those dollars are.

@MichaelHHeng 5 жыл бұрын

Hi Nick, greetings from Germany and big thanks for your videos and the great help in using YNAP. Some things are different in Germany, e.g. the handling of credit cards, however your tips have helped me a lot. I have been waiting for this video for a long time, because I run a "small business". Now I have started in March with YNAB and according to the recommendation at that time I combined the private and the business budget. After this video I would like to separate this. My question: how can I separate the current budget into two budgets without losing the data of the last four months? Or do I have to start over? What would you do? Thanks for a hint. 😃👍🏻

@yusufyaran 2 жыл бұрын

Great work Nick , thank you. I would like to ask : what if we work with multi currencies ; our income come in two currencies , we have two credit cards both in separate currencies , and our two bank checking accounts are in two separate currencies. What do you suggest ? Also since YNAB doesn’t work most of the banks as linked , do you know a plug in that allows other countries banks to be linked ? Thank you Nick .

@shaunaferguson6102 3 жыл бұрын

I just found your channel and am running through your videos! My husband owns a small business and I am stepping in to help him run it, he struggles with the back end paperwork. I have a question about the operating expenses. Parts/supplies for his job are complicated. He can easily spend $14,000 on one job in materials. How would this look for operating expenses? Should we have a separate account for that alone? And keep other "normal" Operating expenses the same? If so do you have a recommendation on a percentage? I didn't know if the book addresses this? Thank you for any advice!

@alwayskateellen 3 жыл бұрын

Thanks for this video Nick! I have COGS related to all my income which comes in through shopify/paypal - so I thinking I will set up an account to set aside my expected COG and the related sales tax for each of my daily deposits to hold the money I know I will need to spend related to that sale and the sales tax that I am required to hold for the month and pay. An account seems better than a budget category for this because I don't have any goals in advance, the expenses are directly linked to the sales. So I'm wondering though what to do when I purchase COGS on a credit card... it's starting to confuse me a bit because the YNAB default is to ask for a category... Ideas?

@optionsrehab 4 жыл бұрын

Hey Nick, I have gone through my entire business and set up budgets onto YNAB. I used my Profit & Loss statement for the entire year last year to get my amounts and categories. I'm stuck on just one last thing.. in my Cost Of Goods section of my P&L there is a line time for "Merchant Fees" and not sure if they should show up in my budget side. It's a couple of accounts we need in order to collect fees from either patients or a third party insurance company. Thanks for your help! DR

@MrAhicks1968 3 жыл бұрын

How do you manage the material expenses using profit first? I collect a material expense deposit before I begin a project. Should I add materials under the opex category?

@nikkisartvideos6412 4 жыл бұрын

Hey Nick! Great video...I'm a fan of all your vids and your Flash Briefings...they are so helpful! I know you said that you're a sole prop but I was wondering if you happened to know or would recommend a method for implementing PFirst for an S-Corp. Particularly with the Owner's Comp...I am the only person in my business, but since I'm a SCorp, I pay myself via Payroll. My payroll processor calculates all the taxes (for my company and for me as an employee) and I see the values on the tail end (so I don't know how I'd plan for it ahead of time. Fortunately the processor charges for the taxes vs payroll payout separately so I can categorize them separately, but I'm hitting a mental block on how to run the bi-weekly and quarterly routines in YNAB as proactively as you do when I have a 3rd party running my payroll (keep in mind I do have the book as well...evidently I need to dust it off if my answer is in there).

@lisatschudi2542 3 жыл бұрын

I have this same question. My husband and I are co-owners but also work in our business (LLC taxed like S corp). We've set ourselves up as formal employees to be paid bi-weekly on payroll via our accountant's service along with our one non-owner employee. So our own salaries along with the non-owner employee's pay and also taxes are all paid in huge transactions bi weekly. We intend to also give ourselves additional owner profit quarterly, depending on business success and availability of funds. Last year (first year with this new business) we did this. Not sure how to set this up in YNAB and how to evaluate TAP/CAP percentages in this case. I guess I have to enter a split transaction based on the pay stubs every time that payroll is taken from the accounts? Do you treat owner-employee wages/salary as OPEX and then only -additional- owner profit as such?

@MatinaRose 3 жыл бұрын

Do I really need to open 7 (!!) actual accounts? Can I not use ynab to track the money and have one biz checking, the 2 savings and a personal checking?

@wendicarter 10 ай бұрын

Hi Nick. Love your video's. I'm an interior designer. I sell products and services. One thing I'm not sure how to handle in Profit first are things I buy in advance and try to sell later. In my case, I buy a lot of accessories, antiques, etc...to have stocked up so when we do an install, we can pull from our inventory to style our installs. So, for example, I may buy $7K worth of accessories (at my wholesale cost). I have to fund that, although over the next 3 months, I may sell those accessories for $11,000. How would I deal with this in YNAB?

@girl1974 4 жыл бұрын

Hi Nick! I really enjoy your channel. I have been using YNAB since 2009-YNAB Pro. I keep personal and business accounts separate. I read profit first about a year ago, I totally buy into the concept of PF but struggle with implementation. I am a serial side-hustler. Rental property, baby gear rental, the occasional remodel job and we have an event center that we rent 1-3 x's a month. My struggle is that the CAPS and TAPS for each of these businesses feel different because of OPEX and profitability etc. Currently, I have them all under 1 umbrella company because I don't want all the different fillings and other overhead that goes with separate business registrations. None of them do a huge volume alone, but together they support a life I really enjoy. So here is my question for you, Do you think the best way to handle this in YNAB would be to have multiple sets of PF categories in one budget? For example, I could set up the categories in YNAB as Rental house Income, Rental house Profit, Rental house Owner Comp, Rental house OPEX, Rental house Taxes. Then Baby Gear Income, Baby Gear Profit, Baby Gear Owner Comp, Baby Gear OPEX, Baby Gear Taxes. And so on for Event Center, Remodels, etc. I am very disciplined in using YNAB so I expect to continue to use 1 checking and 1 savings account as you mentioned as an alternative in your video. I would really appreciate your opinion and insight. Thank you for your thoughts sir!

@optionsrehab 4 жыл бұрын

Hey Nick, Great Videos! Question.. I have a merchant account, Paypal, zelle, and Groupon which all get dumped into my Income account. I saw you added Paypal as it's own separate account but you said it was strictly to track the fees? I can't say I'm necessarily worried about that at this time So i don't need to add these accounts right? Thanks Diego

@yayaglass 4 жыл бұрын

Hi there!! I hope that you consider doing a Nomad Specific video on YNAB usage. In this vid, you mentioned that due to living full time in an RV, you use an Accountant because taxes are a little more complicated. I'll be in a Skoolie next year so I'd really love to know what you mean by that. I have consulted an accountant, but he is completely clueless about how to deal with working on the road. What is the difference between working from a sticks and bricks or working from an RV? Are there expenses that are not allowed because Home is an RV? I currently can deduct my gas, mileage & vehicle depreciation/expenses because I drive from job to job, daily. If I'm living in an RV, working on an internet based business, how do those and other expenses change, as deductions? I realize you're not a tax professional, I'd just love to understand the general idea of how this will change, since I can't find a tax professional who understands business/life on the road. If you don't feel confortable giving advice here, feel free to contact me, or perhaps you have a resource for those of us who are about to head out there. Thanks so much!!! Karen

@drm237 3 жыл бұрын

Just FYI, instead of using Google as a calculator, on a mac, you can hit Command + Space to open Spotlight search and you can type math directly into that to do quick calculations! It doesn't like dollar signs for some reason, but I guess neither do calculators...

@mappedoutmoney 3 жыл бұрын

Thanks for the tip Dan! Appreciate that. Definitely faster your way

@gosamer23 4 жыл бұрын

Question..if you are using the budget side to track all the percentages, do you REALLY need to have 7 separate accounts. Seems like more work than necessary. The joy of budgeting in this way, giving the money a job, is that you don't need multiple accounts. I could see having one checking and one savings. I really want to do this, but was wondering if 7 separate accounts are truly necessary. I have not read the pay yourself book and watching your video is this first time I've heard of this concept, so I may be missing something. THANK YOU!!

@brokemen1455 4 жыл бұрын

I am new to YNAB, and I am also trying to use it for my business and understand the account balance (i.e., OPEX Account) verses the Budget balance (i.e., OPEX budget). For example, if I purchase something using my Chase Prime card, let say $10 for "Office Supplies," and I have added money to Office Supply budget to cover that purchase, now my OPEX Budget has $10 less then my OPEX Account. Is this the way it should be working. I remember you say to make sure that both the "Budget category" and the "Accounts" match. I hope that makes sense.

@burneychoo 4 жыл бұрын

Nick. For Cost of Goods Sold (COGS), which budget category should I put it in? Income or OPEX? Or because Profit First is cash basis accounting, we don't include COGS in the budget? How do we budget for it then?

@CraigDesmarais 4 жыл бұрын

What do you recommend for Business Banking? I saw you use Capital One. I currently have Bank of America but they charge fees for extra accounts. Been wanting to do Profit First forever but looking for the right bank to do it with. Thanks in advance for your advice.

@MovingForwardSolutions 3 жыл бұрын

Is it possible for my book keeper to do this in the YNAB account? Normally it would be in QuickBooks, but I'm curious if they can do this in YNAB for me?

@mariapiaormachea8952 3 жыл бұрын

Hi Nick, I wanted to know if you have tried using YNAB and Profit First without so many Bank Accounts?

@guillaumetastet487 3 жыл бұрын

Hello Nick, thanks for the video. Something I maybe missed but do you have "real" accounts linked to each of "YNAB" accounts for your business ?

@mustbescud Жыл бұрын

So you dont have a Profit Hold saving account? On the video you only mentioned transfering the Tax to your Tax savings

@gallowitz100 3 жыл бұрын

Do you pay fees per month to the bank for each checking account?

@burneychoo 4 жыл бұрын

Nick. I set up a Petty Cash account in YNAB. Logically to me, I will be using funds from OPEX to put money into Petty Cash. But now it bothers me that the OPEX Account balance doesn't tally with the OPEX Group balance in the budget. Any suggestions?

@sergio_ra 5 жыл бұрын

Unrelated to YNAB question... I'm working on SEO for our small local business and noticed that you budgeting $30 for Ahrefs. How did you get that plan? I see it starts at $99 per month?

@whitneysummerford3763 4 жыл бұрын

Have you found a bank that will allow multiple business accounts with no minimums? (I see it for personal accounts, but not business.) And if you just use personal accounts, how do you handle it if someone wants to make a check out to your business name?

@zacweikal Жыл бұрын

Do you store your receipts somewhere?

@jessicadickson9764 4 жыл бұрын

Tons of info, thank you! Have been watching your videos for hours this week and learning all about YNAB. Now that I have a personal budget set up I am wondering how do I go about setting up a separate budget in ynab for my small business?

@juniorlene839 3 жыл бұрын

Is the PowerPoint available ?

@boneheadcycler1412 5 жыл бұрын

Thank you so much! The Profit First video you made a couple weeks ago was the first time that I had ever heard of the concept. Thank you for helping people like me! After your first Profit First video, I immediately opened up an excel sheet to play around with numbers and figure out how it might look for me because I was so excited. Thank you for this YNAB break down! I do have a question, although it probably varies a bit from person to person. At the end of the video, you talked about fluctuating income. What do you think would be the best way to account for this if you do most of your business over 8-9 months of the year then have 3-4 months off? Would you only actually pay yourself ~65% so that there is money left over for the off months? Do you think there is a percentage that would work or should you just figure out how much you need to have saved up and set a goal for that? Edit for clarification: Assuming that 50% of my total income goes to the Owner's Comp. THEN, pay ~65% of that to my personal account.

@mappedoutmoney 5 жыл бұрын

Bonehead Cycler aweomse! So glad that the YNAB breakdown was helpful. And yes! That’s a great question and EXACTLY what I would do. The reason again is because most humans really struggle with inconsistency and we thrive on knowing what’s going to happen. So I would take however much you plan to pay yourself over the course of a year and divide by 12. Another way to say that is take the income you plan to make during that 8-9months. Do the percentage for owners comp per profit first (say 50%) and then divide that number by 12. That’s how much you want to pay yourself each month. Or yes, your 65% of the 50% during the earning months should work as well. It will certainly get you in the ball park. :)

@WillChaseIV 5 жыл бұрын

27:31 - I thought that Profit First recommends setting a certain pay rate for yourself (owner), say $2,500 every two weeks, as if you are paying yourself a salary. This way the owners comp category builds up a buffer (hopefully) that helps deal with fluctuating revenues. If the buffer begins to get large, it is a sign that your business can support a higher rate of pay for the owner! Edit: this is exactly what you discuss at 33:50

@mappedoutmoney 5 жыл бұрын

haha! I was just thinking that as I read this and then got to the last line :) yes, HUGE fan of this... although it typically does take small business owner's some time to work up to this point, that's the goal and it's a massive relief once you get there. Glad you pointed that out!

@erinharmon1756 2 жыл бұрын

@@mappedoutmoney Hey Nick! When would you personally up what you take home from the business? When the owner comp account gets over X% of the standard payout or maybe when you've had X consecutive months of the company generating at a a higher level?

@katkimtv 5 жыл бұрын

Hi Nick, this training is AMAZING. Thank you for going into detail and making it simple. You said that we should separate our business and personal finances within YNAB. So should we create two separate YNAB accounts? How do you navigate between the two yourself?

@CarloCretaro 4 жыл бұрын

Kat Kim would like to know about this too.

@mappedoutmoney 4 жыл бұрын

@@CarloCretaro Hey Carlo and Kat, YNAB lets you create multiple budgets inside the same login, so no need for a new ynab :)

@bellareibijoux6723 5 жыл бұрын

How would you handle inventory as a budget category for Ecommerce sellers. For example for an amazon seller would you deduct the cost of inventory from the payout (income to be budgeted) then apply the allocations based on the remaining amount? In the book profit first for e-commerce I believe she said to pull the amount you spent on inventory for that payout would be deducted off the top and put in the budget for future inventory purchases before allocations. OR would you include in regular OPEX?

@mappedoutmoney 5 жыл бұрын

Ahhhh yes. That's a great point and does change the game. Yes, Cyndi Thomason is definitely the expert here. But to your point, that's the way I would handle it. The Inventory purchases act as a "costs of goods sold." While I don't personally run an e-commerce business, so I don't have first-hand experience, normally costs of good sold comes out first after top-line revenue, and then you run your percentages based on the revenue after subtracting those out... That being said I probably wouldn't split the transaction like I showed with the PayPal fees because the transactions don't necessarily happen at the same time. Instead, I would: Setup another account for purchasing inventory and a category group to represent that account. Have your inventory purchasing expenses go there. When you make a sale, immediately move money from the income account --> inventory account AND move that same amount from TBB to the category for purchasing inventory. Then with what's left over, run your Profit First percentages. Hope that makes sense! But you're saying what I think you're saying, that's how I would do this in Profit First.

@ayospvceman 4 жыл бұрын

Appreciate you man! Who did your intro btw?! 🔥🔥🔥

@mappedoutmoney 4 жыл бұрын

No problem, glad you enjoyed the video! And a guy named Adam Nies in Atlanta. Here's his channel: kzfaq.info He's legit!

@liljohn8d 5 жыл бұрын

Hey Nick! Great vid. The first thing I thought of when you mentioned opening up 5 different checking accounts is - which banks allow you to have a $0 balance on your checking without a fee? For example, the "1) Income" checking account will always be zero'd out and emptied into the other checking accounts (2, 3, 4, 5). The "3) Tax" checking account will be empty once you pay your quarterlies as well, etc. I was thinking of opening business banking with Chase and I believe their minimum balance requirement is $1500. Spark Capital, I believe, now has a similar avg balance requirement in order to avoid fees. Any bank recommendations that allow you to open 5 checking accounts without a balance requirement?

@liljohn8d 5 жыл бұрын

Also! When you pay yourself Owner's Comp, do you pay yourself by just literally transferring money from your business checking to your personal checking (pre-tax) OR do you use an automated payroll system like Gusto to pay yourself post-tax? I'm assuming that if you do use Gusto and place yourself as an owner on payroll and they withhold the taxes for you, the 2. Taxes category / checking account aren't necessary?

@kaldreasewingco.5189 3 жыл бұрын

You could check local banks, we have a couple of local banks that don’t have minimum balance requirements

@WillChaseIV 5 жыл бұрын

Hi Nick, thanks for all the YNAB resources you provide for free! I've been using YNAB since 2014 and love the tool; however, you have changed my approach to how I budget for the better. Thank you again. Question for you: for monthly subscriptions, have you tried making the transaction recurring in the register, as opposed to setting a monthly funding goal? In other words, why don't you use the calendar icon feature in lieu of the pie-chart/check-mark feature?

@mappedoutmoney 5 жыл бұрын

Hey Will! Thanks for watching man. Really glad you're finding the videos helpful and that YNAB has been great for you. I love it as well! As for the question, I do both actually! I prefer the monthly funding goal because I like the idea of setting goals for everything instead of just having certain things scheduled. It feels like I'm planning and making the decision rather than reacting to something I scheduled in the past. When I set a funding goal, I'm playing a game with myself to double check that I truly want to be buying that thing. So I prefer the monthly funding, but I also schedule the transactions as well to make for quick entering.

@WillChaseIV 5 жыл бұрын

@@mappedoutmoney thanks for sharing. I like the monthly funding goal for living expenses and the recurring transactions for fixed monthly expenses, since YNAB puts a little 📅 icon on the budget. The quick budget function works much the same way as the monthly goal, with the exception of rollovers. If I put in a one time cash dump into my phone bill category, the line item will be green for months to come, whereas if I used a monthly funding goal, it would still be orange. That example isn't extremely useful and I know you like to handle rollovers in a purposeful and non lazy way. But the area where it does make a difference is when you budget for something that varies a little each month. If electric has a monthly funding goal of $150 and this month is $110, the category will still show up yellow even though you paid the bill and moved the excess ($40) to another category. I like the calendar method for instances such as that. Hopefully that makes sense.

@mappedoutmoney 5 жыл бұрын

Totally! You make a great point that it absolutely works that way. And if you have the additional funds to handle fluctuating bills I agree that it helps a lot and is less annoying this way. I actually like using monthly funding for fluctuating bills because it allows me to build excess (much like owners comp) during the low electricity months and then have reserves for the high electric months. But in this way I only have to budget roughly the same amount each month. It simulates a fixed bill like Netflix even though it isn’t. As you can tell, most of my decisions are based more on emotion regulation than strict math and logic. But I love the way you think Will. It sounds like you’ve got YNAB working for you, which is the whole point :) I really appreciate the thoughtful comments.

@djtay1906 5 жыл бұрын

Thanks Nick! I have been struggling with this one thing I'm hoping you can help me with. As a DJ using Profit First approach should I pay myself the DJ and then also take the Owner's Comp? Or do I not pay myself and only take the Owner's Comp?

@TomandAriana 4 жыл бұрын

DJ - There are 2 ways that you get paid as the business owner. The first is via Owner's Comp, which is the money that you pay yourself for being an employee and working. This is what you pay yourself for being a DJ. This is where your paycheck comes from. The second way is via your Profit account, which is the money that you pay yourself for being a business owner. You take distributions from this account quarterly.

@WillChaseIV 5 жыл бұрын

Regarding using the google calculator, did you know that you can use symbols + and * inside ynab categories themselves? In other words, when you click in the budgeted column of a category, there is a native calculator built in, similar to an excel formula. Works in the account register too.

@mappedoutmoney 5 жыл бұрын

haha great point! I did know that actually, which is pretty awesome. I've gotten in the habit of making the transfer at my bank first, and then going into YNAB to reflect the transaction. So I just do the calculation in google and go from there. You're totally right though that if I did it in YNAB first, I could get the amount and then go make the transfer. Great point.

@daniellyons6269 4 жыл бұрын

Hey Nick. Love your videos. I've already bought the Profit First book. Just letting you know, I don't think that your affiliate link is working. It doesn't seem to load when I click it.

@mappedoutmoney 4 жыл бұрын

Oh thanks Daniel! I'll check it out and see what's going on. Appreciate it.

@honestlynate7922 5 жыл бұрын

Heres my question Nick. Ynab is great. Can i track my stocks and their value on it? What about my holdings in physical silver and gold? How would i keep that tracked? Would i have to manually update with stock value and spot prices? Any advice would be appreciated. Thanks for all the help btw

@CoachChadCarson 4 жыл бұрын

Honestly Nate that sounds more like something for Personal Capital than YNAB. Tracking assets vs tracking income/expenses.

@juliesimpson2122 3 жыл бұрын

HI Nick. Great video. I have finally set up all my accounts (All 5!) BUT the bank are charging my £7 per month EACH... is it worth it or should I combine? I might see how it goes over 6 months. What do you think?

@mappedoutmoney 3 жыл бұрын

Hey Julie! Yeah, I definitely would try to avoid that :( Check out my video on Profit First in YNAB Simplified. And I show a method for doing it without all those bank accounts (it's a more recent video)

@CoachChadCarson 4 жыл бұрын

Hey Nick - I am getting ready to set this up. What do I do if I have a bunch of cash already sitting in bank account from past profits? It's left over after already paying estimated taxes and paying some owner pay. In my non sophisticated way, I was just leaving it there for future reinvesting in the business and reserves.

@mappedoutmoney 4 жыл бұрын

Hey dude! I would probably create a new category called "Future Biz Investments" Then I wold split this cash between your legit "Profit" account and the "Future Biz Investments" As where you keep the money, you could keep it in OPEX or open a new account. But don't keep it in the income account. I have an account for future biz investments and a category for it. And when the business does really well one month, after doing my normal profit transfers, if I have a lot more than needed to cover OPEX, Owner's Comp etc... I'll throw the excess into future business investments. So I would just use the cash you have now as a jumpstart on that.

@CoachChadCarson 4 жыл бұрын

Nick True - MappedOutMoney cool! That makes sense, Nick. Thanks for feedback. May not get dove before FinCon, but I will see you there!

@mappedoutmoney 4 жыл бұрын

Coach Carson sounds great man. Really looking forward to it!

@optionsrehab 4 жыл бұрын

One more questions... it seems that on the budget screen the first line that appears is an "uncategorized" line and it has all my income. Does this mean I have to go through each and categorize? This will take me forever to do so..

@mappedoutmoney 4 жыл бұрын

Hey there, yes, all income should be categorized as "To Be Budgeted". The nice thing is that once you do it the first time, as YNAB learns when you make money it goes to TBB, it will automatically start putting it there. But yes, you should never have uncategorized transactions. All income should be To Be Budgeted.

@mindywhite7061 4 жыл бұрын

Hi Nick, With the income, I was a little confused. I have an e-commerce store and like you, I am charged payment processing fees. Currently, these for me are classed as an OPEX. From the looks of it you had yours separate and count income as sale - processing fees = income where as I look at is as the sale = income and then the processing fees is part of the OPEX. Can you please clarify Thank you!

@mappedoutmoney 4 жыл бұрын

Hey Mindy! It's really 6 one way and half dozen the other. I don't think it matters that much. Me personally, I like to have my fees taken right off the top and since they technically come out BEFORE they ever hit my income account, I like to take them there. Since the fees are never shown in the OPEX account I don't like to have them there. But there's nothing inherently wrong with doing it in the OPEX category if that makes you happy. :)

@karliegaskins1629 4 жыл бұрын

If you pay yourself some with a w2 payroll and some with draws, do you just subtract that W2 amount for owners comp? This makes it seem like it may be easier just to keep it all as draws.

@anthonydesalvo6392 4 жыл бұрын

You (employee and owner) should be receiving both W2 (the worker) pay and shareholder distribution (the owner). The W2 has FICA withholding and the profit sharing does not. The IRS will be in your life at some point if you take no W2 income and all shareholder distributions. The ratio of income:shareholder distribution that the IRS will allow has never been clearly established. I've seen 2:1 as a common ratio.

@mappedoutmoney 4 жыл бұрын

This. Thanks for jumping in here Anthony! Personally, the way I do this, is by handling "owner's comp" as my main salary (W2 pay) and then I take an owner's draw once a quarter as a percentage from Profit. But there's certainly more than one way of doing it.

@sergio_ra 5 жыл бұрын

In New Zealand, transfers between different bank accounts are instant. Between banks, they usually happen on the same day. Does it mean that Owner's comp account is unnecessary, if I could just transfer to my personal account right away?

@veteranexteriors 4 жыл бұрын

No because you still want the account to build up extra eventually. He discusses this towards the end of the video

@burneychoo 4 жыл бұрын

Unfortunately in my country, i cannot be setting up several accounts as recommended in Profit First. To have 7 accounts, I will need to open 7 different accounts in 7 different banks. Which is costly because of maintenance fees. It will also become unruly. And I don’t only have 1 company. Is it ok to set up OPEX, Owner’s Salary and Income using one physical account and the remaining to use another bank account (meaning: 2 physical Bank Accounts only). I would then use YNAB to control the budget for the accounts.

@burneychoo 4 жыл бұрын

Sorry. You answered my question in your video. I commented before I finished watching your video. Thanks again.

@alyssaa1711 4 жыл бұрын

If you have linked your accounts would you still add transactions through YNAB, or just wait for them to show up?

@mappedoutmoney 4 жыл бұрын

I personally do a mix. I mostly add them in, especially for larger transactions and then when YNAB links, it will overwrite them. But it's really whatever works for you.

@alyssaa1711 4 жыл бұрын

When you talk about your bi weekly routine, are you meaning twice per week or twice per month?

@mappedoutmoney 4 жыл бұрын

I do every other week, sorry :)

@gregtosi8790 4 жыл бұрын

I love this methodology, but I'm stuck on opening 7 bank accounts. Is there a way to mimic this with categories? I opened one biz account at Ch*** Bank and it was a huge hassle. Thanks!

@dahiannasoris-becerril2480 4 жыл бұрын

I was just thinking the same thing, so I came to the comments to see what he answered....

@Noah_527 4 жыл бұрын

There absolutely is. I am new to the Profit First idea but my side business has 4 categories: state taxes, federal taxes, profit and expenses. Granted I’m not pulling in $100K annually and this isn’t my primary source of income, so maybe this makes sense when you scale up. However I have a single checking account to handle all funds. The game changer for me was created a completely separate budget in YNAB so this all exists outside of the family budget. Works well so far for last few years!

@ashleehoward47 4 жыл бұрын

So do you have to create and pay for a 2nd YNAB account tp set this up for a business? Like if not then ALL the accounts both personal and business would be linked into same YNAB account just under a separate budget... I haven’t figured out how to assign one account for one budget and another group of accounts for another separate budget. Hope that question makes sense! We have no idea what our numbers would be for our business because not every sale has the same expense and profit margin and we never know what our sales will be as they swing day by day and month to month and even season to season. We always have to save thousands up in the winter to help us pay our house bills in the summer months when we go in then negative because snow birds go home and or sales cut in half or worse.

@mappedoutmoney 4 жыл бұрын

Hey Ashlee! Nope, you don't need to pay for a separate account. I have multiple budgets all under the same YNAB login and I just choose to link the accounts that I want. You don't have to add any accounts to any budget that you don't want to add. Hope that makes sense :)

@ashleehoward47 4 жыл бұрын

Nick True - MappedOutMoney how does Profit first handle a business where not all jobs (we sell signs) yield the same profit. Typically our small jobs have high mark ups (because they eat time still but cost us less cash wise) but our big jobs may save us time but are very costly for raw materials. So a $2000 job may have 85% material expenses in it while a $25 job only has 4-5 bucks in it. I can’t reconcile how cash flow would work in profit first for a business like ours. If I were to need 85% of the sale just to cover the materials for the job how can I take off just a set % amount from the top aka gross? Also our sales swing wildly. Some months when our season (snow bird season) is full steam ahead we do double what we do in the summer. We always have to save thousands more in the winter to cover the losses in the summer. When I was a waitress I had to do the same thing since I’m Florida the winter was always better money with snow birds here and summer was always a drought especially the hottest 3-4 months. So again- using just a % base of total sales each month could be great in winter maybe but we wouldn’t survive in the summer months if the extra isn’t set aside. We always shoot to save 3k for the summer drought and even that we have a hard time reaching. Sometimes we come out of summer behind and have to use the first fruits of winter to pay back our personal savings account. Sorry for the long post- just trying to learn these systems and see if they can be used in a unpredictable business like our sign shop. I’m currently on chapter 4 of this book you speak of!!!

@CP-jn2ce 4 жыл бұрын

Just wondering why you need to have 7 separate physical accounts if you're using YNAB. Why not just set up 7 unlinked accounts and do it manually with just one account?

@CP-jn2ce 4 жыл бұрын

I should've watched the whole video. You answer my question at 31:00. Thanks!

@LaughinLoneStar 3 жыл бұрын

Which video can convince me of having multiple bank accounts instead of simply using categories for the same purpose?

@mappedoutmoney 3 жыл бұрын

Don’t :) Go watch my most recent video on profit first and ynab. Use categories :)

@courtneymiller2768 5 жыл бұрын

I have a small business with just a little income each month currently. My bank is charging me monthly maintenance fees around $17. If I opened all these checking accounts, I think it would be too expensive for me. What do you recommend? ( Is there a certain threshold of income you should reach before starting this method? Is there a bank that doesn't charge any maintenance fees? Do you recommend using YNAB categories to create the same profit-first strategy but with just 1 simple checking and 1 savings account? )

@mappedoutmoney 5 жыл бұрын

HOLY COW! That's nuts. I would move banks. A bank that has $17/month fees makes no sense. Either find a local credit union that has no fees, another local bank, or go online. I personally use Capital One's Spark Business accounts. You could also check out Chase bank. But yes, I don't pay any fees for my banking, ever. If you don't want to do the multiple checking accounts, yes, you can just use the YNAB groups and categories to build the same strategy but not do the accounts and just keep it all in one. That's totally fine too as long as you have the discipline. But I personally hate those fees so much that I would move banks even if I was only going to maintain one account. But that's me :)

@courtneymiller2768 5 жыл бұрын

Thank you!

@dahiannasoris-becerril2480 4 жыл бұрын

@@mappedoutmoney I was wondering the same thing. So even if my credit union doesn't charge monthly fees, do I have to have 7 ACCOUNTS?? My brain is having a hard time wrapping itself around that part....

@aleishamadeleine 4 жыл бұрын

Do you have a way that you track receipts within YNAB?

@mappedoutmoney 4 жыл бұрын

No, there’s not currently a way to track receipts inside YNAB. :(

@aleishamadeleine 4 жыл бұрын

@@mappedoutmoney Can I ask how you keep track of your receipts? :)

@mappedoutmoney 4 жыл бұрын

Aleisha Morgan I don’t ;) lol Since I put everything on credit cards I just use the credit card ledger as a receipt if I really need to go back and find something. I checked around with a few accountants including the one I used last year and they all said that’s what they do now. But I’m sure different businesses may be different.

@mauriceogunn9119 4 жыл бұрын

Do you open both banks as a business account or personal account?

@mappedoutmoney 4 жыл бұрын

If I'm using an account for business purposes, I get a business account. It's not the end of the world to use a personal account. But the main reason you want to use a business account is that if you ever get sued, you’ll be able to separate business from personal and show that you use business accounts. Just like doing an LLC, this is one more step to protect your personal assets by keeping them separate from the business. Thanks for watching!

@mauriceogunn9119 4 жыл бұрын

Nick True - MappedOutMoney thanks brother