Picture your business funneling most of its income into expense accounts, leaving only the bare minimum for profit. This is the scenario many businesses are stuck in, following a conventional approach to finances where revenue is first allocated to operating costs, and what remains is the profit. But what if we said there’s a model that flips this all too common scenario on its head?

Welcome the profit-first approach. This financial management model performs a twist that prioritizes profit. Unlike the traditional model where profit is saved for last, profit-first approach pushes it upfront.

The profit-first approach operates through the creation of five separate banking accounts, covering different aspects of your finances:

1. Income Account: Here, all your revenue is housed.
2. Operating Expenses Account: A fixed portion of your income is earmarked for recurrent operating costs.
3. Taxes Account: A stipulated percentage is set aside to fulfill tax obligations.
4. Profit Account: A percentage is drawn as profit right off the bat.
5. Owner’s Pay Account: The owner’s salary or withdrawal is also assigned at the onset.

The shift the profit-first strategy brings isn’t solely financial but also mental. It’s purpose is to facilitate profit-making by limiting the spendable amount after setting aside the profit.

So, why should your business adopt the profit-first approach?

1. Money Management: By putting profit first, you eliminate overspending risks and can manage cash flows better.
2. Instant Profitability: No need to wait till year-end to measure profit margins. With this approach, it’s available to you instantly.
3. Expense Decisions: The constrained funds available for operation costs push towards more thoughtful allocation of resources.

However, the profit-first method necessitates maintaining precise financial data. And that’s where our team at Deitz Consulting steps in. We can assist you in:

1. Setting Up Profit-First Accounts: Start up the five accounts necessary for profit-first.
2. Determining the Correct Percentage: We assist in reviewing your financial data to identify the optimal allocation.
3. Ensuring Data Accuracy: We help to maintain your financial data and ensure it reflects your actual figures accurately.
4. Managing the System: We are there to help with regular updates, system maintenance and to provide comprehensive reports.

Ready to give this profit-driven system a try? Don’t wait! Click Implement Profit-First Now!

The profit-first approach questions the norms and prompts you to rethink. When you prioritize profit, your view of handling financials drastically changes. It’s time to put your profits first!