Better Biz Info | A Profit First Professional Firm | Profit First in Kansas City, Missouri 

When you look at financial statements, it's like driving your car looking backwards in the rear view mirror. That doesn’t help you know where you are or where you’re going. You have to have a plan in place that, even if you can't always see every number, the plan works for you in moving you forward to where you're trying to get to. 

Most people I've talked to before they start working with me say "my bookkeeper is always 30 days behind! I have no idea where I'm at until the middle of the next month!" While your Profit and Loss and Balance Sheet are valuable tools, they are simply there to help you know how you are doing on your current track. They can help give you insight into things you can change, but they do not make the changes themselves-they only reflect them. 

What you need is a system that will plan ahead so that your financial statements reflect a business that is preparing for the future. You need a system that is intentional about setting aside money for profit, for payroll, for owner's pay, for taxes. You need a system that works to eliminate debt and reduce expenses to only what you actually need to operate your business. And the system we suggest is Profit First. 

It is impossible to change the past. All we can do is look to the future. It is the same with your finances. No matter what your finances look like right now, you can begin to implement a system that takes control of your cash flow, rather than letting it control you. 

The Profit First system has been implemented by over 500,000 business, and boasts increased profits and a profitable cash flow. This is because Profit First doesn't wait for the bottom line and hope there is Profit leftover. With this system, you are setting aside Profit First before you do anything else. So that famous GAAP formula (which, spolier alert, doesn't create a profitable business!) becomes: 

 Logically the math is the same, but from the stand point of the entrepreneur’s behavior it is radically different. With Profit First, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses. This way, you are taking the initiative and acting intentionally in your business, rather than reacting.

Profit First sets aside money from your revenue for Profit, Owner's Compensation, Taxes, and shrinks the operating account so that you can cut unnecessary expenses. Opening separate accounts and allocating money into them on a regular schedule as Profit First instructs, enables you to take the reigns in your finances, rather than letting that cash-eating monster control you. It helps you prepare for your future, rather than trying to change your past. 

Here's some more Profit First basics that teach how the system works: