Moving to the Profit First method to manage your business cash flow has all kinds of benefits — More profitability! More sustainability! Clear insights! Know where your money’s going!
But unless your business is still a twinkle in your eye, you probably already have some kind of bookkeeping set up. You may even already be working with a bookkeeper who has their own method of managing your books.
So what’s involved in implementing Profit First when you may already have a set of (possibly messy) books?
How are you supposed to get your bookkeeper on board?
Here are the answers, plus some more insights on moving to Profit First.
Step 1: Why change?
As much as I love helping people move to the Profit First method, it’s important to understand why you want to change.
What about traditional bookkeeping and cash flow management isn’t serving you? I’ll help you figure this out first thing so that we can build your system in a way that addresses whatever is missing for you.
If there’s nothing actually wrong with what you’ve been doing, but you want to improve your profitability and sustainability with Profit First, that’s something we’re experienced at handling, too.
Step 2: Don’t fix what ain’t broken
Moving to Profit First doesn’t have to be a sea change for your business. In fact, you don’t even have to fire your current bookkeeper.
It’s usually less expensive to fix something than start over fresh. If your current bookkeeper will come along for the ride, and you’re happy with them, that works just fine.
Step 3: Preparing for the move
Your books should be in good shape before you move to Profit First. That way, you’ve got a solid system that will be easy to maintain.
Your current bookkeeper can make sure everything is cleaned up and ready to go, or we can jump in and do that for you.
Step 4: What to tell your bookkeeper
If you want to keep your bookkeeper and they want to learn how to implement Profit First, send them on over to the Abundantly Clear program.
If you’re keeping your bookkeeper and they’re not interested in Profit First, that’s just fine — you can still use Profit First yourself. Since Profit First is inherently about your cash flow, not your books, you can use it without forcing your bookkeeper to change.
All you’ll need to do is give them a heads up that you’ll be implementing Profit First and they may see more bank accounts appearing on your books.
This shouldn’t cause issues because your bookkeeper shouldn’t actually be moving your money around, anyway. If you have them touching your money, you’ve opened the door to fraud and embezzlement, so you’ll want to lock that back down immediately.
You’ll need to either get familiar enough with Profit First to move your own money around, or get someone qualified to manage both your cash flow and your books.
Now that I’ve said that, if you really need your bookkeeper to be able to move money around — especially if they’re helping you implement Profit First to manage your cash flow — contact your bank and have them give your bookkeeper permission to make internal transfers within your account, but not external transfers. That way, money can’t disappear from your overall bank account.
Step 5: Common bookkeeper objections to Profit First
Putting Profit First into practice involves setting up four (or more) bank accounts.
One common objection I see from bookkeepers is that you don’t need that many accounts. That’s because bookkeepers actually like reading financial reports and are used to quickly mentally untangling what money is going where. Most people don’t have (or would rather not use) that particular skill, so having defined bank accounts shows you where your money is at a glance.
It’s fine to gently push back and establish the bank accounts you need.
Step 6: Fill in your knowledge gaps
Whether you’re brand new to implementing Profit First and flying solo, working with a bookkeeper to set up Profit First, or having your bookkeeper do it but need to understand what’s going on, we’ve got education and training for you.
Schedule your free conversation now, and we’ll guide you to the best solution for you.
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