“Not Sure Where Your Money’s Gone Again?”
You’re flat out with jobs, the invoices are rolling out, but somehow there’s never enough left over. You’re juggling bills, shifting money around to cover expenses, and feeling like you’re always playing catch-up.
If you’re tired of the feast-or-famine cycle, Profit First can change that. And the best part? You don’t need to be a finance expert to get started. Here’s how to set it up—without the overwhelm.
First Steps to Implementing Profit First:
1. Track All of Your Business Expenses
You can’t manage what you don’t measure.
Are you tracking your expenses before they’re due? I don’t mean waiting until the money’s spent to log it—I mean entering supplier invoices as soon as they come in, so you always know where you stand.
If you’re using Xero, tools like Hubdoc can automatically pull in supplier invoices. Big merchants like Plumbing World and JA Russell can connect directly to Xero to save time. If you’re running Fergus, you can sync invoices straight into Xero too.
✅ Tip: Make sure you’re reconciling and keeping Xero up to date at least once a week—if daily feels overwhelming, aim for weekly. The more current your accounts, the easier it is to make smart financial decisions.
2. Conduct an Instant Assessment
Now that you’re tracking your expenses, it’s time to get real about your numbers.
This means:
Calculating your real revenue: That’s your income after subtracting GST, materials, and subcontractor costs.
Checking your allocations: How much are you currently putting towards profit, owner’s pay, tax, and operating expenses?
Why it matters:
This quick assessment shows you exactly where your money’s going—and where you might be leaking cash. Awareness is the first step to change.
🚨 Important Note: Drawings (what you pay yourself) won’t show in your profit and loss report—they show in your balance sheet. Make sure you account for this when working out what’s actually left over in your business.
3. Set Up Multiple Bank Accounts
This is where the magic happens. Instead of having one big account where all your money blends together (and disappears), you’ll separate it into specific accounts:
Income Account: All revenue goes here first.
Profit Account: A set percentage saved as actual profit.
Owner’s Pay Account: Your pay—yes, you deserve consistent income!
Tax Account: For GST and tax, so you’re never caught short.
Operating Expenses Account: What’s left to cover day-to-day costs.
I’ve even added a few extra accounts for my business:
Team Account: So payroll is always covered—non-negotiable.
Annual Expenses Account: For big bills like accounting fees or software renewals.
Abundance Account: Saving three months’ worth of expenses for slower periods like Christmas.
Why it matters:
This system helps you see your money clearly. You’ll know exactly what’s available for spending, saving, and paying yourself. No more “accidentally” dipping into tax money to cover shortfalls.
✅ Tip: Set up your tax and savings accounts with Heartland Bank or a similar bank that takes 24 hours to transfer back to your main account. This forces you to plan ahead rather than make impulse withdrawals.
4. Allocate Funds Regularly
Once your accounts are set up, the next step is consistency.
Pick a regular day each week (I like Fridays) to move money from your income account into your other accounts based on set percentages.
I’ve got a simple spreadsheet that does the maths for me—I just plug in the total from my income account, and it splits the amounts automatically.
Why it matters:
You’ll always know your tax is covered, your profit is growing, and you’re paying yourself regularly. It’s financial peace of mind, one transfer at a time.
✅ Tip: The books recommend doing this once a week, but I have a very short payment cycle in my business, so I transfer funds daily whenever I receive a large payment. Adjust this based on your cash flow needs.
5. Start Small and Adjust Gradually
Here’s the good news: you don’t need to flip your finances upside down overnight.
Start small. Allocate tiny percentages if that’s all you can manage right now. The key is to build the habit. As your business adjusts, you can tweak the numbers and watch your profits grow.
Why it matters:
Small changes, done consistently, lead to big results. Profit First isn’t about perfection—it’s about progress.
✅ Tip: Profit First recommends adjusting your percentages every quarter. Your first quarter is all about building the habit—making sure you transfer money religiously every time. If you don’t stick to the process, it won’t work! Once it’s second nature, you can start tweaking your allocations.
Final Thoughts
If you’re feeling overwhelmed, stuck in that feast-or-famine cycle, or just plain tired of stressing about money, Profit First can change everything. It’s not complicated. It’s not just for “finance people.” It’s for tradies like you who want to know where their money’s going—and keep more of it.
Ready to take control?
Book a free discovery call, and let’s chat about how you can make Profit First work for your business.
