Profit First Bank Accounts | The 5 Business Bank Accounts You Should Have!

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Profit First Bank Accounts | How Many Business Bank Accounts You Should Have
If you have seen any of our previous videos on the Profit First System, then you will know we are Certified Profit First Professionals. Profit First is a book written by Mike Michalowicz. You can see our overview of the Profit First system here:
Profit First Book Summary | Cash Flow Management Strategy for Business:
• Profit First Book Summ...
Today we are talking about the 5 bank accounts you should have for your business and why you need these 5 accounts.
WORK WITH US:
Matterhorn Business Development is a business mentoring and Certified Profit First Professional firm. Learn more about how to get our eyes on your business here: www.matterhornbizdev.com/work...
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Buy Greg's book Fun at Work: amzn.to/2Ry4zn2
Buy Profit First: amzn.to/37EQmd4
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More videos from Matterhorn Business Development:
Why Bookkeeping is Important for Small Business Owners (You Need to Hear This!):
• Why Bookkeeping is Imp...
Pricing Strategies in Business | This Mistake Will KILL Your Profit!: • Pricing Strategies in ...
7 Ways to Measure Business Success | The Business Startup Series Episode 6:
• 7 Ways to Measure Busi...
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Пікірлер: 62

@MatterhornBusinessDevelopment 3 жыл бұрын

Looking to implement Profit First while also increasing revenue and spending less time in the business? Check out our group mentoring program here: adventuretoprofit.com/

@kstevenson3504 Жыл бұрын

Thanks! I"m going to watch this whole series!!!

@Darrenaco 3 жыл бұрын

great video, thanks for the break down.

@tylerclark-realtor 3 жыл бұрын

Great video! I just got the profit first book and I’m wanting to structure my business with this concept. I’m a new realtor and it is very important to me to build a strong foundation for my business to grow on. As of now, I am the sole employee in my business, and plan on staying that way for awhile. I am having trouble figuring out how to use this method for my business as I’m not really sure how much I should set aside for certain accounts. Here’s a break down of how I disperse my commission checks. Ex: $3000 commission to income account, 20% into tax account, 10% of remainder in Business expenses account (this includes annual dues, supplies, business marketing. What ever is left over from that I pay myself which is pretty good portion. I then take 10% of owners pay and put it into a personal savings account. What ever is left over I use to pay bills. I hope all that makes since. 20% tax 10% business expenses 10% personal savings Remainder - bills.

@globalluxurytravel1 2 жыл бұрын

Reading Profit First now with a group. This was a good video!

@TivonyByTifani 4 жыл бұрын

I needed this thank you so much!

@MatterhornBusinessDevelopment 4 жыл бұрын

Glad you found it! Welcome to the Channel!

@normalandaverde2030 Жыл бұрын

Great video. I really have to implement this to my 2 businesses. Question, how much should I put into my Tax account? And Operation expenses? Thanks

@aliciaandmartinaaloharedla11 2 жыл бұрын

yall are amazing!

@MatterhornBusinessDevelopment 2 жыл бұрын

Thank you!

@transformationalthynker 3 жыл бұрын

Thanks so much ✌🏾

@MatterhornBusinessDevelopment 3 жыл бұрын

You’re welcome!

@KingWillonius 3 жыл бұрын

Thank you, thank you, thank you.

@MatterhornBusinessDevelopment 3 жыл бұрын

You're welcome!

@jomaralvarado8463 4 жыл бұрын

Thank you for the breakdown. As a retailer, I am trying to figure out when do I take out for sale taxes and materials/inventory? Would I take out sales tax and inventory from the "total account" before distributing to the profit first accounts because this will indicate my "real income"?

@MatterhornBusinessDevelopment 4 жыл бұрын

Right. Your sales tax should come out first and put into its own account. Then your materials/inventory should also be taken out to give you your Real Revenue.

@jomaralvarado8463 4 жыл бұрын

@@MatterhornBusinessDevelopment Hello, thank you for your response. I was just wondering, as an Ecom merchant would I be placing "shipping costs" within the Opex Account or would I include it within the inventory account to indicate my real revenue? Thanks!

@fionaarthurs8151 4 жыл бұрын

Thanks for the video. Does this system work for non profit organizations? If so, how does it differ?

@soniacampbell3063 3 жыл бұрын

Same question

@DialloStevens 3 жыл бұрын

Please share what kind if account each should be (business savings/ checking/money market...). I was thinking about regulation d transaction limits and minimum balance requirements to avoid feed. Really glad you are doing these videos.👍👍

@MatterhornBusinessDevelopment 3 жыл бұрын

Glad you like the video! I usually recommend Profit and Tax to be savings accounts because you will only be withdrawing 4 times a year. We have another video about how to open bank accounts on our Profit First playlist that I recommend you watch!

@MatterhornBusinessDevelopment 3 жыл бұрын

Also, all of these should be business accounts.

@DialloStevens 3 жыл бұрын

@@MatterhornBusinessDevelopment yes. I currently have four business accounts (operating, tax, emergency fund, and another residual income account). I pull 15% gross receipts as soon as income comes in and send to personal. Considering alternative approaches. I am looking into an s-corp election for my LLC, and this strategy sends well-suited for that. Thank you.

@MatterhornBusinessDevelopment 3 жыл бұрын

Nice! We have a real estate client who has fully implemented Profit First and it's been working great for him. He's very thankful to have money in the bank when the market shifts or if he doesn't have any deals lined up for the month. :)

@DialloStevens 3 жыл бұрын

@@MatterhornBusinessDevelopment Your channel is pretty good! I decided to repurpose that last account as my Profit Account at 1% (additional to my current drawings) and may add the Income Account - the problem is the dang minimum balance requirement for a checking account, which would make another $2K untouchable and earning no interest. I just moved banks, and a credit union seems to have other logistical cons. Oh well!

@justthoughts8872 6 ай бұрын

Your awesome

@1carlos83 3 жыл бұрын

As a self-employed/business owner, What's the difference between Profit Account and Owner's Pay? At the end of the year can you move that Profit Account money into Owner's Pay? Just having too much cash in bank accounts that barely pay any interest makes me double think about these two accounts.

@MatterhornBusinessDevelopment 3 жыл бұрын

Owners Pay is for your salary as the owner/operator. With the Profit account, you take half of the account every quarter as a profit distribution and reward as the owner.

@1carlos83 3 жыл бұрын

@@MatterhornBusinessDevelopment Thank you!!! I watched another video in your channel and it also mentioned what you just answered.

@MatterhornBusinessDevelopment 3 жыл бұрын

Great! 😁😁

@hstang50 8 ай бұрын

I'm with a credit union the has fees for everything. Want to go back to Wells Fargo but monthly fees add up. What do you recommend for accts to avoid monthly fees? Can they be savings accounts?

@MatterhornBusinessDevelopment 8 ай бұрын

Profit and Tax can be savings accounts. Relay is the official banking platform for Profit First and the best option I’ve seen. 0 fees and up to 20 accounts. You can check out my full review of it here: The Best Banking Platform for the Profit First System - Relay Review and Demo kzfaq.info/get/bejne/ga2oe5V0nsuzoXU.html

@keithlithander9648 4 жыл бұрын

need help on how to arrive at my owners comp percentage i do take a salary and shareholder dist

@MatterhornBusinessDevelopment 4 жыл бұрын

The percentage should be about what you would pay someone else to do the job you are doing in the business (managing, CEO, doing the actual delivery of the service, etc). As far as salary or distribution, you should consult your accountant to see what makes the most sense for your business.

@rondacollins4150 3 жыл бұрын

Do we open 5 accounts at 5 different banks, or find a "profit first friendly" bank that allows me to open 5 accounts with their bank?

@MatterhornBusinessDevelopment 3 жыл бұрын

5 accounts at one bank! Credit unions and smaller regional banks are usually more “profit first friendly” and don’t have fees. We have a video about opening your accounts here: kzfaq.info/get/bejne/a7R0rc2Ss9a-gn0.html

@justthoughts8872 6 ай бұрын

Which banks

@pcfradkin 3 жыл бұрын

Is there a product that might be able to help with this? Between kids and work I just don’t see myself having the time to set this up on my own :/

@MatterhornBusinessDevelopment 3 жыл бұрын

It will take some work to set up in the beginning, but once you are doing it consistently, it really only takes a few minutes to do the transfers. I suggest calling your bank ahead of time to get the accounts set up for you. That way you just walk in and sign the paperwork instead of sitting there for an hour while they set it up. Otherwise we do have a whole module on Profit First in our Adventure to Profit program. We have special spreadsheets and checklists to help you take it one step at a time and get it implemented.

@TheCriticalChris 5 ай бұрын

10:13 well it really does matter if the bank charges monthly fees for each separate account.

@MatterhornBusinessDevelopment 5 ай бұрын

Yes and in the next sentence I mention that credit unions usually don't have fees. I don't think someone should open 5 accounts and pay fees for all of them. We cover tips for opening the bank accounts in this video: kzfaq.info/get/bejne/a7R0rc2Ss9a-gn0.htmlsi=4pTF3FAt6RQyR_Vc

@Starchild1984 3 жыл бұрын

Do you think a online bank or pursue a credit union. I’m with chase I asked banker about it he looked at me like he seen a ghost lol.

@MatterhornBusinessDevelopment 3 жыл бұрын

Lol! I have some clients who use Chase or B of A but personally I can't stand them. I love credit unions. You should be able to use an online bank too. So it's really up to you and what you need. If you don't need to be going into a branch and making deposits or withdrawals, then an online bank can work for you. The important thing is their fees. Make sure you aren't being charged for each account and that there aren't minimums of how many transactions you need to be doing.

@rosselencastellar3467 4 жыл бұрын

Should someone pull a personal bank account or business bank account to run your business?

@MatterhornBusinessDevelopment 4 жыл бұрын

Definitely a business bank account!

@ItsBrickee 2 жыл бұрын

I am currently in the process of opening my accounts and I was thinking about having the owners pay a traditional checking account. My thought process behind this is its my money and If I were to have it in a business account I would have to take account for everything that was purchased with my “pay”. Please correct me if I am wrong because I do see you mentioned to someone that everything should be an business account.

@MatterhornBusinessDevelopment 2 жыл бұрын

The owner's pay account is really just a "holding account." Your percentage of income is allocated into that account, and then you pay yourself a set salary from that account that goes into your own personal account to cover your personal expenses. Doing it this way ensures that even though income may vary and sometimes the allocations to that account are larger or smaller, your salary amount is always covered and in that account. Hope that helps!

@ItsBrickee 2 жыл бұрын

@@MatterhornBusinessDevelopment Yes!! This make a lot more sense. For some reason I could piece that gap together 🤦🏽‍♀️ thank you!

@ItsBrickee 2 жыл бұрын

@@MatterhornBusinessDevelopment I have two more fairly short questions. I am not sure if this is the format to ask?

@MatterhornBusinessDevelopment 2 жыл бұрын

@@ItsBrickee hey Brittnay! You can send us an email at info@matterhornbizdev.com!

@Starchild1984 3 жыл бұрын

So if your a one man show should you do a payroll account to pay yourself since the owner pay account you will disperse every 90 days or am I missing something

@MatterhornBusinessDevelopment 3 жыл бұрын

The Profit account is the account you will be taking half of every 90 days. The Owners Pay account is an account to cover your payroll.

@kaitlyncarlson3721 3 жыл бұрын

This is the cutest dad in the world

@kstevenson3504 Жыл бұрын

Let's say you don't have enough money in your profits or expense account. Where do you fund your business and how do you keep track of additional funds? Do you put the money into the Income account? Or directly into the Operating Expenses account? I assume its the income account. But that seems like a lot of unnecessary transfers especially if you need the money in there fast.

@MatterhornBusinessDevelopment 6 ай бұрын

If you are investing money into your business it can just go straight to the operating expenses account.

@jgreengo151 Жыл бұрын

Would love to talk to you guys.

@MatterhornBusinessDevelopment Жыл бұрын

Awesome! You can schedule a time with us here: eiaj0jcj.paperform.co/

@justthoughts8872 6 ай бұрын

Other than credit unions

@MatterhornBusinessDevelopment 6 ай бұрын

My new favorite is Relay! Full review here: The Best Banking Platform for the Profit First System - Relay Review and Demo kzfaq.info/get/bejne/ga2oe5V0nsuzoXU.html

@malloryartusio 2 жыл бұрын

Quick question: Is that 1% profit transferred out on the 10th and the 25th or is it quarterly/annually? PS....Abby, it is SO SWEET to see your dad look at you so PROUD and SUPPORTIVE of who you are! (At least that's how it came across on KZfaq :) )

@MatterhornBusinessDevelopment 2 жыл бұрын

You transfer the 1% on the 10th and 25th just like you would for all other accounts. At the end of each quarter you take half of what is in the Profit account as a distribution! And thank you for saying and noticing that! That is definitely an accurate representation of how he treated me!😊