Struggling to pay your bills on the due date is a sign that something’s not right in your business finances. Finding the root cause of cash flow issues is often difficult if you’re not using Profit First.

When we complete a profit first assessment for clients, it shows us exactly where the cash has gone. Sometimes it’s a surprise for clients but most business owners have a pretty good gut feel about what they’re doing, they just need a reality check. And the numbers never lie.

Here’s the thing, just as common as not being able to take a fair ‘wage’ from your business is another serious issue, this is where business owners take too much from their business. Sounds like a good problem to have, right?

Business owners in this situation often don’t realise what’s happening, especially if they are paying themselves a PAYE wage. It’s the extra drawings, the entertainment, the personal car costs and personal loans…. All running through the business.

Don’t get me wrong, it’s great to minimize tax as much as possible, after all…. That’s the kiwi way! It’s not until we do a profit first assessment that people realise how much they’re taking.

If you’re using Profit First to manage your business finances, you’ll have an Owner’s Pay bank account. This is the account you use to pay for all your ‘personal benefit’ expenses. If there’s no money in there, then you can’t afford the expense and you need to look at what changes need to be made in the business to get more cash in your Owners Pay account.

If you’re not using Profit First, and paying for all your personal benefit expenses out of your main bank account, then find there’s not enough to pay your bills on the 20th, you won’t be able to see what the problem is and you won’t know what to fix.

If this sounds familiar, book a Profit First assessment with us. You’ll walk away knowing exactly where your money is going—and what to change.