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Why Five Business Bank Accounts Beat One: Build a Profit First Money System · Profit Points Podcast

• 0:00
  SPEAKER_00: Hey, glad you're here.
• 0:01
  SPEAKER_00: This is Profit Points, and I'm Megan Schwann, your accounting sidekick and certified profit first professional and fix the snips advisor.
• 0:09
  SPEAKER_00: If you're a small business owner who wants to actually understand what is happening in your business financially, not just survive it, but genuinely get it, you're in the right place.
• 0:20
  SPEAKER_00: Every episode covers one concept, uses real numbers, and ends with something you can actually do.
• 0:26
  SPEAKER_00: That's the deal.
• 0:27
  SPEAKER_00: Let's talk about today's topic.
• 0:31
  SPEAKER_00: What if the single most powerful thing you could do for your business finances this week didn't require a financial advisor, didn't require a spreadsheet, and took you less than an hour.
• 0:44
  SPEAKER_00: Wanna know what it is?
• 0:46
  SPEAKER_00: It's opening the right bank accounts.
• 0:50
  SPEAKER_00: Today I'm going to walk you through exactly how to set up the profit-first banking structure and why five accounts beats one every single time.
• 1:00
  SPEAKER_00: I'm Megan Schwan, your accounting sidekick.
• 1:03
  SPEAKER_00: This is Profit Points, where we turn financial concepts into practical systems.
• 1:08
  SPEAKER_00: Today, let's build yours.
• 1:11
  SPEAKER_00: So the problem is that the vast majority of small business owners run their entire operation through one checking account.
• 1:19
  SPEAKER_00: Revenue comes in, expenses go out, and the balance at any given moment is supposed to tell you whether you're doing okay, especially when you're practicing bank balance accounting.
• 1:32
  SPEAKER_00: But one account can't tell you whether you set aside enough for taxes.
• 1:37
  SPEAKER_00: It can't tell you whether you actually paid yourself what you deserve.
• 1:42
  SPEAKER_00: It can't stop you from accidentally spending money that's already committed to something else.
• 1:48
  SPEAKER_00: One account creates one pile of money.
• 1:52
  SPEAKER_00: And one pile always gets spent down to whatever feels like a comfortable level.
• 1:59
  SPEAKER_00: In profit first, it's a money system that uses five accounts.
• 2:04
  SPEAKER_00: Account one is income.
• 2:06
  SPEAKER_00: Every dollar of revenue gets deposited here first and only here.
• 2:12
  SPEAKER_00: This is your holding account, not your spending account.
• 2:16
  SPEAKER_00: And it's so powerful because then you can really see your money come in and increase over a period of time.
• 2:24
  SPEAKER_00: It can be a huge game changer for people when they don't have a pulse on what is actually coming into their account.
• 2:30
  SPEAKER_00: Account two is profit on your allocation dates.
• 2:35
  SPEAKER_00: I recommend a particular day every week to do this.
• 2:39
  SPEAKER_00: A percentage of your income balance moves over to your profit account.
• 2:44
  SPEAKER_00: This account is not for spending, it's for your quarterly profit distributions.
• 2:49
  SPEAKER_00: It's your Nasdaq.
• 2:51
  SPEAKER_00: It's your profit sitting on your books waiting for you to bonus yourself out or being available for an opportunity.
• 3:01
  SPEAKER_00: Account three is your owner's pay.
• 3:04
  SPEAKER_00: This is your draws, distribution, pay account.
• 3:08
  SPEAKER_00: Your owner's pay allocation moves here on the same schedule once a week and gets transferred to your personal account on a regular cadence.
• 3:17
  SPEAKER_00: Have you been paying yourself consistently on a schedule?
• 3:21
  SPEAKER_00: If not, this is gonna be huge for you.
• 3:23
  SPEAKER_00: Account four is your tax.
• 3:26
  SPEAKER_00: Your tax allocation lives in this account.
• 3:29
  SPEAKER_00: It's meant to never be touched until estimated payments or your own balances are due.
• 3:34
  SPEAKER_00: So if taxes have been a struggle, if getting that tax bill at the end of the year has been painful, this account is gonna change your life.
• 3:44
  SPEAKER_00: Account five is your operating expenses.
• 3:47
  SPEAKER_00: This is the only account you spend from for business operations.
• 3:52
  SPEAKER_00: The balance in this account is your real operating budget.
• 3:56
  SPEAKER_00: So as always, let's walk through how this works in practice.
• 4:01
  SPEAKER_00: Let's say$15,000 comes into your income account.
• 4:05
  SPEAKER_00: On Tuesday, your dedicated allocation day, you run your allocations using your target allocation percentage or your current allocation percentages that we discussed on the lap last episode.
• 4:18
  SPEAKER_00: $750 goes to profit,$7,500 goes to owner's pay,$2,250 goes to tax, and$4,500 goes to OpEx.
• 4:26
  SPEAKER_00: Now your operating expense account has$4,500 to run your business for the next week.
• 4:33
  SPEAKER_00: Can you afford that new software subscription?
• 4:36
  SPEAKER_00: Let's take a look at where your OpEx is and where your monthly nut is sitting.
• 4:42
  SPEAKER_00: If the money is there, then yes.
• 4:45
  SPEAKER_00: If not, then the decision is made for you.
• 4:48
  SPEAKER_00: One less thing to think about a system that is in place to help.
• 4:52
  SPEAKER_00: Look for a bank that offers free or low business, low fee business accounts because you'll need multiple ones.
• 5:00
  SPEAKER_00: Online banks like Relay Financial are specifically built for profit first and allow you to manage all five counts and even more if you need them in one dashboard.
• 5:11
  SPEAKER_00: Avoid the banks that are going to charge monthly fees per account.
• 5:15
  SPEAKER_00: With a bank like Relay, you can set up automatic transfers by percentage.
• 5:21
  SPEAKER_00: So the allocation happens without requiring willpower.
• 5:25
  SPEAKER_00: Automate the system and the system does the work.
• 5:29
  SPEAKER_00: Feel free to reach out to me if you want more info on relay and I can connect you to my contact there.
• 5:36
  SPEAKER_00: This week, open at least two new accounts if you don't already have them.
• 5:40
  SPEAKER_00: I would recommend a dedicated tax account and a dedicated profit account.
• 5:45
  SPEAKER_00: And you don't have to start putting major percentages in there if you haven't been doing anything like that.
• 5:51
  SPEAKER_00: Start small, start with one to two percent.
• 5:54
  SPEAKER_00: Or do the allocations that we talked about last on the last episode to figure out what your current allocation percentages are so that you can start putting a percentage in there that makes sense for your business.
• 6:07
  SPEAKER_00: You don't have to build this full system overnight, but separating the tax money and the profit money from your operating expenses is gonna have a huge impact as a first step.
• 6:17
  SPEAKER_00: So do it this week.
• 6:19
  SPEAKER_00: The profit first money system isn't complicated, it's intentional.
• 6:23
  SPEAKER_00: And intentional money management is what separates the businesses that thrive from the ones that survive.
• 6:30
  SPEAKER_00: We don't want to be just surviving with our businesses.
• 6:33
  SPEAKER_00: We want them to be thriving.
• 6:35
  SPEAKER_00: When your business thrives, it pours into so many other things.
• 6:39
  SPEAKER_00: Yourself, your family, your community, your team.
• 6:42
  SPEAKER_00: It's amazing the ripple effect that happens.
• 6:45
  SPEAKER_00: So you need to be profitable.
• 6:47
  SPEAKER_00: Remember that the one that one of the main things that make your business both sustainable and valuable is to have systems in place.
• 6:55
  SPEAKER_00: This is a money management system for your business.
• 7:00
  SPEAKER_00: And putting it in place can change so many things in your business and your life.
• 7:06
  SPEAKER_00: If you want help implementing profit first in your business, if you want to need help choosing the right bank, calculating your allocation, setting up the system, that's what we do.
• 7:17
  SPEAKER_00: We help build the system, we help do some coaching related to it.
• 7:21
  SPEAKER_00: We do your bookkeeping, your taxes, anything your business might need.
• 7:25
  SPEAKER_00: Book a strategy call with Sidekig Accounting.
• 7:27
  SPEAKER_00: You can go to chatwithmeg.com and book a time there.
• 7:31
  SPEAKER_00: And in the meantime, do the action, create those accounts, start picking your allocation day, moving the percentages based off of the revenue you've received from the past week.
• 7:42
  SPEAKER_00: It is going to greatly impact your life.
• 7:45
  SPEAKER_00: Until then, I will see you next time.
• 7:48
  SPEAKER_00: All right, that's your episode this time.
• 7:50
  SPEAKER_00: Don't forget your action step.
• 7:52
  SPEAKER_00: I want you to actually do it, not just add it to the list.
• 7:56
  SPEAKER_00: If this episode was helpful, share it with a fellow business owner who needs to hear it.
• 8:00
  SPEAKER_00: And if you're ready to go deeper on your specific numbers, book a strategy call with Sidekick Accounting.
• 8:06
  SPEAKER_00: Go to chatwithmeg.com, and I'll see you next time on Profit Points.