Can you do a video explaining your opinion on business bank accounts and how much cash to keep in them at different stages of revenue and whether in growth mode or profit mode? Checking, retained earnings. Possibly payroll and savings if you think those are valid as well. Thank you for the videos.
Yes. I've never followed profit first or separated money into accounts (payroll, tax, sales tax, etc.). I have no issue with that strategy, but I've never found it necessary because we keep clean, up-to-date books, so there isn't much confusion about how much money we have that can be spent vs. what is owed to the government. I think each person should follow whatever strategy is easiest for them. BUT, using the multiple bank account strategy does not let you off the hook for keeping very clean up-to-date books at all times. And, its critical to learn and understand how to read your P&L, Balance Sheet and understand you're cashflows. I think the bank account strategy is generally taught because so many owners don't keep their books up to date or learn how to read their financial reports.
For the outdoor biz, we saved two months of gross revenue before we started distributing. This was probably overly conservative, but I've never regretted it. We kept over 3 months at SA. I've heard some people suggest 2 months operating expenses. These are numbers that made me feel comfortable.
#1 fan. Investing is key. Roth and Traditional. Compounding is the 8th wonder of the world. -- I think thats what Warren Buffet said lol
Compounding is the 8th wonder of the world!
Both in money and learning.
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Can you do a video explaining your opinion on business bank accounts and how much cash to keep in them at different stages of revenue and whether in growth mode or profit mode? Checking, retained earnings. Possibly payroll and savings if you think those are valid as well.
Thank you for the videos.
Yes. I've never followed profit first or separated money into accounts (payroll, tax, sales tax, etc.). I have no issue with that strategy, but I've never found it necessary because we keep clean, up-to-date books, so there isn't much confusion about how much money we have that can be spent vs. what is owed to the government. I think each person should follow whatever strategy is easiest for them. BUT, using the multiple bank account strategy does not let you off the hook for keeping very clean up-to-date books at all times. And, its critical to learn and understand how to read your P&L, Balance Sheet and understand you're cashflows. I think the bank account strategy is generally taught because so many owners don't keep their books up to date or learn how to read their financial reports.
Thoughts on retained earningsfor the business?
For the outdoor biz, we saved two months of gross revenue before we started distributing. This was probably overly conservative, but I've never regretted it. We kept over 3 months at SA. I've heard some people suggest 2 months operating expenses. These are numbers that made me feel comfortable.