It is time to do your first transfers, exactly how you do this part will vary slightly depending on your business. If there are certain payments you have coming in on a regular basis from subscriptions, standing orders, direct debits, or other regular payment methods, you can set up bank transfers that automatically transfer the correct percentage of your deposited funds into the right account.
If your income isn’t that regular, or you have some income that is irregular, you can manually calculate and transfer the amounts. It doesn’t matter how often you do this but you will want to keep it to a regular rhythm. You need to calculate your percentages on the balance in your Income Account, and transfer the relevant amount to the right account. (This will empty your income account and bring the balance down to 0)
The most important thing at this point is to discipline yourself so that you don’t take money from the wrong account. This is absolutely crucial. Take a look at the accounts we set up last week.
Your profit account is where you will accumulate profit – don’t touch this money, leave it exactly where it is.
Your tax account contains money set aside for GST and tax purposes. Again, don’t touch this (unless it’s to pay your GST or tax bill!).
Your owner’s pay account is money used to pay your own wages or drawings (this you can touch, but only for personal use, not to cover business expenses!). You can use an existing personal account for this.
Your operating account should be used to pay your day-to-day expenses and running costs.
Your revenue account is where all your incoming money is deposited. No spending from this account!
Getting the Profit First system setup can take a little time and patience, and don’t be surprised if it takes you a while to get used to it.
Starting any new habit is tough, and money habits are particularly tricky. Persevere, it’s well worth it!