Ep. 145- Total Revenue Minus Materials, Subs & More

We welcome back the ever-popular Billie Anne Grigg, Profit First Professional’s Chief Profit Guide. Together, Danielle and Billie Anne dive into the intriguing world of "above the line" expenses within the Profit First framework.

The episode covers above-the-line expenses, such as materials, subcontractor costs, pass-through expenses, franchise fees, and more. 

They also emphasize the importance of understanding your financial numbers and owning allocation day to achieve permanent profitability.

IN THIS EPISODE:

• [00:55] - Explanation of "above the line" expenses and real revenue.
• [01:47] - Common mistakes made with above-the-line expenses.
• [03:27] - Handling W-2 employees and commissions.
• [06:16] - The importance of pass-through expenses.
• [06:56] - Managing franchise fees.
• [07:50] - The role of a deposit account in organizing expenses.
• [09:00] - Simplifying allocation day using a spreadsheet.
• [12:19] - The freedom and clarity Profit First brings to managing finances.
• [14:02] - Success stories of large businesses implementing Profit First.

KEY TAKEAWAYS:

• Above-the-line expenses should be items directly tied to revenue, such as materials, subcontractor costs, pass-through expenses, and franchise fees. These should be deducted from total revenue before determining real revenue.
• Profit First simplifies financial management by reducing the need for complex budgets and allowing you to focus on one key number – the total amount available for allocation.
• Profit First is not just for small businesses; it's essential for large businesses, especially due to the complexities involved in managing cash flow and expenses. The principles of Profit First can benefit businesses of all sizes.

 

GUEST BIOGRAPHY: Billie Anne Grigg

 

Billie Anne has been a bookkeeper since before the turn of the century. She is a QuickBooks Online ProAdvisor, LivePlan Expert Advisor, FreshBooks Certified Partner and a Mastery Level Certified Profit First Professional. She is also a guide for the Profit First Professionals organization. In 2012, she started Pocket Protector Bookkeeping, a virtual bookkeeping and managerial accounting service for small businesses.

 

Billie Anne Grigg - Linkedin 

Pocket Protector Bookkeeping - Website 

 

ABOUT THE HOSTS:

 

Danielle Mulvey is a former flight attendant-turned-entrepreneur and owns multiple businesses doing $50 million in annual revenue. She is one of the exclusive, select group of Mastery-Certified Profit First Professionals worldwide and the go-to “HOW TO IMPLEMENT” workshop facilitator for Profit First and WSJ Journal best-selling author Mike Michalowicz following his keynote speeches. Danielle is currently running multiple businesses, from start-ups to mature businesses with 10-year plus track records and revenues ranging from $1M to $40 million in annual revenues and is a certified numbers geek about Profit First, leveraging the DIY cash management system for small business to achieve maximum profitability. She can personally guide business owners to achieve maximum profitability based on her 25 years of experience as an entrepreneur