February 5, 2025 • 17 mins
Establishing multiple bank accounts is essential for therapy practice owners looking to gain control of their finances and simplify cash flow management. This episode outlines crucial accounts to set up, including profit, owner's pay, taxes, and operating expenses, while also emphasizing the importance of additional accounts like payroll, emergency funds, and others to support the unique needs of therapy practices.
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Episode Transcript
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Speaker 1 (00:00):
If you just have two bank accounts in your business a
checking account and a savingsaccount you are missing out on a
huge opportunity to really gaincontrol of your finances.
Now we talk all the time abouthaving some multiple bank
accounts to organize and helpmanage your cash flow, but today
I'm going to guide you throughthe exact accounts that we think
everybody should have, and thensome extra ones that might be
(00:23):
beneficial and help you out.
My name is Craig and I'm theCEO of Desi Financial Coaching.
Our goal is simple to help yourun a therapy practice that is
permanently profitable.
If you own a solo or grouppractice, we're here to help you
build a business that createsmore time, makes more money and
serves more people.
This is the Therapy BusinessPodcast more money and serves
(00:49):
more people.
This is the Therapy BusinessPodcast.
Hearing the word cash flow a lotof times sends practice owners
running for the hills.
It's kind of one of thosebusiness-y financial world terms
that can feel overwhelming.
Like what in the world even iscash flow?
How do you manage it?
And, if you're like mostpractice owners, it's not really
anything they taught you whileyou were in grad school.
Now we work with practiceowners like you all the time on
(01:11):
this, because we know that itcan be overwhelming.
And you got into your craft ofhelping people and now, here you
are, trying to run a business,manage marketing, manage the
finances all of the above and itcan leave us feeling stressed
out and burnt out.
Manage the finances, all of theabove, and it can leave us
feeling stressed out and burntout.
That's why we believe insimplifying things as much as
(01:31):
possible.
I have a background in education.
I used to be a fourth gradeteacher about a decade ago and
when I started helping peoplewith money, that was my MO.
That's what we pride ourselvesin is being able to take complex
ideas like managing cash flowand making it something simple,
making it something that anyonecould do, anyone could
understand and that integratesitself into your life and into
(01:52):
your current habits.
Now, the key element to this ismanaging our bank accounts,
having multiple bank accounts tomanage our money.
Why that's because, yeah, sure,you should have a bookkeeping
software like QuickBooks orsomething similar.
You should be keeping up todate on those, but that doesn't
necessarily mean that's what weshould be using to make
day-to-day decisions in thebusiness around our finances.
(02:14):
I think it's completely normal.
And if you don't know how toread a cash flow statement or a
balance sheet or a profit andloss, that's totally fine.
Or a balance sheet or a profitand loss, that's totally fine.
And maybe you do know how toread them.
But how often are we actuallylooking at them and using them
to make educated decisions?
The problem we run into is onethey can be over our heads.
(02:34):
We are looking at this sheetand we're going awesome.
Okay, what am I supposed to dowith this balance sheet?
Yeah, sure, I'm getting someinfo off of it.
I have no idea what it means.
I have no idea what I should bedoing with it.
It's all retroactive.
Even if you could decode it andput it into action in your
business, it's retroactive.
What I mean by that is it'salmost too late.
(02:55):
You have no pulse on it.
If I wanna know what happenedthis month, it's probably going
to be middle of next monthbefore I can really see what
happened to the numbers.
That is too late to take anyaction.
At some point.
We need to have a way to lookinto our business today,
tomorrow, in this exact moment.
How am I doing financially?
What should I be doing in thisnext week or two to move the
(03:16):
business forward, and what can Ido financially to do that?
The key here, like I said, isbank accounts, so I want to walk
you through some core bankaccounts that we recommend Now.
The first few I have talkedabout multiple times.
We have a podcast all abouttransforming your practice using
the Profit First system.
I believe it was episode two orthree.
I would recommend going backand finding that and listening
(03:36):
to it.
I'm going to walk you brieflythrough the accounts, but this
system is really reallyimportant and implementing it
into your business is key.
So, after you finish thisepisode, go back to get deeper
context into some of these firstfive accounts that I'm going to
talk about Now.
The five accounts that we thinkeveryone should start with and
there's going to be more thatwe're going to add on to the end
(03:57):
are these five accounts thatwe're going to nickname income,
profit, owner's pay taxes andoperating expenses.
Income is an account that we'regoing to use to have deposits
drop into.
If you're using SimplePractice,stripe, paypal, whatever you're
using to collect payment, itgets deposited directly into
this income account and it justsits there.
(04:17):
We don't pay bills out of thisaccount.
We don't pay our team out ofthis account.
It is literally a holding placefor income.
Then on a weekly basis for meit's every Friday I log in and I
move money from income to eachof these other core accounts.
I have an account for profitbecause we prioritize profit and
we teach our practice owners toprioritize it.
This means that we take acertain percentage of every
(04:39):
dollar that comes in and we moveit directly into that profit
account.
We can use this account to payourselves bonuses.
We can use this account to payour team members bonuses.
We can use this to build upemergency savings, pay down debt
.
Whatever we wanna do, thisaccount is a priority.
We're gonna move a certainpercentage into profit every
time money comes in.
Then we're gonna have anowner's pay account.
(05:00):
That's you.
You're the practice owner.
We are going to prioritize you.
Too often, if we just have twobank accounts where we have one
business checking account whereeverything comes in and goes out
, we're left paying ourselvesscraps.
We see this time and time againBusiness owners paying
themselves scraps.
They are taking homeinconsistent pay.
They're taking home less thanthey ever did when they were
(05:21):
working for someone else and wewant to resolve that.
We want to fix that.
The way to do that is to have abank account purely dedicated
to your paycheck.
So we're going to nickname thatowner's pay and we're going to
put a percentage of every dollarthat comes in into that account
.
The next one we want is fortaxes.
We don't want to be stressingout at the beginning of every
year because we might have a bigtax bill due.
(05:41):
We want to be paying our taxeson time, consistently, whether
you're running it throughpayroll or whether you're
logging in quarterly to pay yourtax estimates.
We want to set aside cash inorder to accomplish this.
So every time money comes in, apercentage goes to taxes and
then the rest goes intooperating expenses.
We have a percentage going intoyour operating expenses.
Now, this is to pay your bills.
(06:03):
This is to pay any expensesthat you have subscriptions, any
services, any softwares,whatever you have.
Your rent to your office comesout of this operating expense
account.
So these are the five coreaccounts that we believe in that
we recommend.
This is all based on that bookProfit First.
That recommends these fiveaccounts.
(06:23):
Now, that said, it's kind ofgeneralized for all industries
and we are here to talkspecifically into therapy
practices, whether you're amental health therapist, a
physical therapist or somethingin that realm, your business
looks a little bit differentthan a lot of other industries.
Let's say, a marketing agencythat we might work with is going
to have a completely differentstructure.
(06:43):
They're not going to be dealingwith insurance.
They're not going to be payingteam members based on commission
or a flat fee for each sessionthey do.
So there's a lot of nuance thatcomes into it that we think
therapy practices should havesome additional bank accounts on
top of those core accounts thatI just outlined.
One that I think is incrediblyimportant is a payroll account.
(07:03):
We're going to separate outoperating expenses and payroll
into two separate ones.
Now, I'm not talking about yourpayroll, so you, as the
business owner, you're coveredin that owner's account.
We're talking about your team,your contractors or your
employees, your admin team, yourclinicians, your therapists,
(07:24):
all those people, your PTs,whatever you have on your team.
We are going to put theirpayroll into this one account.
One of the biggest stresses thatpractice owners face is whether
or not they will make payroll.
They are just reaming withanxiety around this.
They're looking at their bankaccount.
They're trying to do mentalgymnastics, financial gymnastics
in their brain of will I beable to make payroll?
(07:45):
This just ensures that thathappens.
It's prioritizing it.
So every time money comes in,we want to put a percentage into
that payroll account.
Now, the percentage is going tovary based on a lot of factors.
So if you do a commission split, so if every clinician who
works for you is taking 60%,well, that doesn't necessarily
mean 60% of every dollar thatcomes in is going in there.
(08:08):
Maybe you're seeing patients,maybe you have other things out
there, like courses.
So what I would recommend isgoing back and looking at your
profit loss statement.
I know I said those are thethings that we don't wanna use
to dictate short-term decisions,but this is gonna help you.
Big picture, look and see howmuch did we earn last year.
How much did we spend inpayroll.
(08:28):
So let's say you earned$100,000, for simplicity's sake,
and you spent 50,000 on it inpayroll.
Well, that means 50% of whatyou brought in went toward
payroll and that means ourpayroll.
Of what you brought in wenttoward payroll and that means
our payroll account.
We're going to be putting 50%of every dollar that comes in
into payroll.
This should work out andbalance itself out, and it's
something we want to keep apulse on every quarter.
(08:50):
So looking and saying, okay,how much was going toward
payroll?
Did we cover enough?
Is it increasing?
Is it decreasing?
Do we need to adjust thatpercentage?
Then we can make sure payrollis always covered, always taken
care of, no more stressing aboutthat.
Another account that I recommendhaving is one we would call the
vault.
It can also be called youremergency fund, your savings.
This is your safety net, yourcash safety net, so that, if
(09:15):
business goes down, maybe youhave one of those Decembers and
Januaries that is just rough.
You know, you got the holidayswhere a lot of clients are
canceling, a lot of yourclinicians might be out on
vacation.
You're out, and then you moveinto January where it's flu
season and suddenly you're like,okay, it's been 60 days and our
client numbers have been waydown, our session numbers have
(09:36):
been way down and you'restarting to stress and panic
financially.
Well, having a cash nest egg onhand like this is huge.
Now you could allocate apercentage every month into the
vault, which is perfectly fine,but you could also, like I was
talking about, that profitaccount is, as money accumulates
, into profit, at the end of thequarter you can take half of it
(09:57):
and move it down into thatvault.
So every quarter you're dumpinga large sum of cash into that
vault to build it up.
I recommend having about threeto six months of your operating
expenses in here, including yourpaycheck in that account.
How much do you need to payyour team, to pay the rent, to
pay your softwares and to payyou every month?
(10:18):
And then we're going tomultiply that by three to six
and keep that in that savingsaccount ready to go in case you
need it.
Another account that we thinkeveryone should have is a
training and coaching ortraining and development account
.
Investing in yourself is soimportant.
It's something that successfulbusiness owners do Now, whether
this is going to conferences,whether this is joining master
conferences, whether this isjoining masterminds, hiring
(10:41):
coaches, whatever it is that youare investing in yourself and
that you're prioritizing it.
So one to 2% of every dollarthat comes in, if you allocate
it toward training anddevelopment, it's easier for you
to make those investments whenthe time comes.
So let's say you meet with abusiness coach or a profit coach
, I don't know and you'retalking to them and you're
(11:02):
wanting to invest in thatprogram.
You're nervous about thefinances.
Having an account that isspecifically for that is going
to ease that tension, ease thatwondering of can I afford this
or not?
So having some money set asideintentionally to reinvest in you
as the business owner again, ifyou're going to be flying to
conferences, something that cancover your hotel, your flight,
(11:23):
the conference ticket, if you'rewanting to join networking
groups or mastermind groups oran online course, whatever it is
having cash on hand is going tobe huge.
In order to do that, all right,the next one I'm going to
recommend is if you have debt,so we would call this a debt
destroyer account.
This is going to help you paydown your debt faster.
Now, your operating expenseswill be covering any accruing
(11:46):
debt.
So if you have a credit cardthat you are rolling, let's just
say, meaning you are chargingall your subscriptions, all your
bills are being charged to thatcard, and then you're paying it
off at the end of the month,well, opex will still cover that
because that's your expenses.
So you're going to make sureyou're at least not accruing new
debt on that credit card.
And then you can have a debtdestroyer account where we maybe
allocate a few percentagepoints to that and then every
(12:11):
month, you take whatever's inthat account and you throw it
down to reduce that principalbalance on your debt.
Now there's a lot of ways totackle debt in your business,
whether it's the debt snowball,the debt avalanche, meaning
looking at interest rate.
Debt snowball will be smallestbalance to largest balance, debt
avalanche is the highestinterest rate to lowest interest
rate.
There's a lot of things toconsider, but I would say, just
(12:33):
look at your options.
We do have an episode as wellon getting out of debt in your
practice and a lot of thosedifferent strategies, so I'll
link that in the show notes ifyou want to go back and check
that out.
All right.
So, using an account to pay offdebt if that is on your goal,
if that's one of your goals forthe year, let's do that.
And then, finally, anotheraccount that I recommend is a
(12:53):
retirement account.
If you're trying to invest inretirement now as a business
owner, maybe you don't have a401k for your team, maybe you
don't have a retirement plan foryour team, but that doesn't
mean that you can't beintentionally setting money
aside to invest in that.
Now I have a completelydifferent business, which is my
music business, and in that one.
I have an account titled RothIRA and every time I earn money
(13:16):
from music, a certain amountgoes into that account and then
every month it gets investedinto my retirement.
So I'm intentionally settingthat money aside.
As a business owner, we see alot of times that people leave
their nine to five.
Maybe it's a corporate job orwherever they are.
Maybe they have a 401k plan orsome kind of retirement plan and
then they go into business forthemselves and suddenly five, 10
(13:39):
plus years go by and theyhaven't been investing in their
retirement, which is a hugeopportunity missed.
So we want you investing for thefuture, and having an account
where, again, you have a fewpercentage points set aside can
be huge.
Now what I would do is I wouldtake some of your owner's pay
percentage and set that asidefor for this retirement fund.
(14:00):
So let's just say you'reputting 40% into owner's pay.
Maybe you put 35% into owner'spay and 5% into your retirement
fund.
It really comes down tofiguring out your key
percentages.
Now, percentages can be tricky.
It's really kind of a challengeto go back One.
We want to go back and say whatpercentage have I been spending
(14:22):
, like I said, on payroll, onoperating expenses, what have I
been taking home, whatpercentage of that compared to
my revenue?
But also, where should I be?
What is a healthy percentage?
I can look at those things, butif I'm spending 90% on
operating expenses, that's nothealthy.
We wanna be able to get ourbusiness to a healthier place.
Now on our website we do have afree quiz that's gonna at least
(14:43):
help you pinpoint whatpercentages should you be doing
in your business with these bankaccounts.
So you're welcome to take thatfree quiz.
Just answer a few questions andit's going to send you a custom
report that's going to sayhere's what percent should be
going into profit, here's whatshould be going into owner's pay
, et cetera.
So go to our website.
I'll put that in the show notesas well.
Take that quiz to get someinsight into that.
We also have a team of coacheswho.
(15:05):
This is what we do.
We know the therapy industryincredibly well.
We work with a lot of practicesand we help them pinpoint.
Where am I today?
What where?
Where am I financially?
What does my business look likeright now, percentage wise,
where should I be and how can Iget there?
So we give you that snapshotand we walk with you and guide
(15:27):
you through this whole process,because what we've learned is
most people wouldn't considerthemselves money people.
They get overwhelmed by it orthey just have so many balls
they're juggling right now intheir business that this is
something that is incrediblyimportant but has just gotten
pushed to the back burnerbecause of all the other things
that you're doing.
I highly highly recommend youschedule a call with one of our
(15:49):
coaches to get some helpfiguring out where your business
is now and figuring out how toget to that best place you can
possibly be.
It is one of those working withour team.
Yes, there's an investment, butit is one of those things where
you get that investment backbecause we are saving you money
by showing you exactly how tocreate that system.
So there's always a link in ourshow notes to get connected
(16:11):
with one of our coaches.
I highly recommend you takeadvantage of that.
All right, these are theaccounts we should have.
If you are using a bank that hasfree accounts, then I would say
there's make, make use of it.
There's really not a limit towhat you can have.
If there's something you'retrying to do, if you're saving
for a building or an employee,open an account for those things
.
If you have a bank that chargesyou for every account that you
have open, I recommendconsidering switching to one
(16:33):
that has free checking businessaccounts or checking free
savings accounts for businesses.
So there are a lot of creditunions out there.
Relay Financial is one that wehighly recommend to therapy
practices.
It's an online business bank.
They work really well, withProfit First, so you can
automate those transfers in yourbank accounts.
(16:53):
You can add bank accounts injust a couple minutes by hopping
into your account and you canadd, I believe, up to 20
accounts right now.
So Relay is fantastic.
We will drop a link in the shownotes to that as well.
So lots of links coming at youtoday Fantastic.
We will drop a link in the shownotes to that as well.
So lots of links coming at youtoday.
So finding a place that hasfree checking accounts is going
(17:13):
to be vital in order to reallyhone in on managing your cash
flow.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview and share it with a
practice owner that you may knowIf your practice needs help
getting organized with itsfinances or just growing your
practice.
Head to therapybusinesspodcomto learn how we can help.
If you just have two bank accounts in your business a
checking account and a savingsaccount you are missing out on a
huge opportunity to really gaincontrol of your finances.
Now we talk all the time abouthaving some multiple bank
accounts to organize and helpmanage your cash flow, but today
I'm going to guide you throughthe exact accounts that we think
everybody should have, and thensome extra ones that might be
(00:23):
beneficial and help you out.
My name is Craig and I'm theCEO of Desi Financial Coaching.
Our goal is simple to help yourun a therapy practice that is
permanently profitable.
If you own a solo or grouppractice, we're here to help you
build a business that createsmore time, makes more money and
serves more people.
This is the Therapy BusinessPodcast more money and serves
(00:49):
more people.
This is the Therapy BusinessPodcast.
Hearing the word cash flow a lotof times sends practice owners
running for the hills.
It's kind of one of thosebusiness-y financial world terms
that can feel overwhelming.
Like what in the world even iscash flow?
How do you manage it?
And, if you're like mostpractice owners, it's not really
anything they taught you whileyou were in grad school.
Now we work with practiceowners like you all the time on
(01:11):
this, because we know that itcan be overwhelming.
And you got into your craft ofhelping people and now, here you
are, trying to run a business,manage marketing, manage the
finances all of the above and itcan leave us feeling stressed
out and burnt out.
Manage the finances, all of theabove, and it can leave us
feeling stressed out and burntout.
That's why we believe insimplifying things as much as
(01:31):
possible.
I have a background in education.
I used to be a fourth gradeteacher about a decade ago and
when I started helping peoplewith money, that was my MO.
That's what we pride ourselvesin is being able to take complex
ideas like managing cash flowand making it something simple,
making it something that anyonecould do, anyone could
understand and that integratesitself into your life and into
(01:52):
your current habits.
Now, the key element to this ismanaging our bank accounts,
having multiple bank accounts tomanage our money.
Why that's because, yeah, sure,you should have a bookkeeping
software like QuickBooks orsomething similar.
You should be keeping up todate on those, but that doesn't
necessarily mean that's what weshould be using to make
day-to-day decisions in thebusiness around our finances.
(02:14):
I think it's completely normal.
And if you don't know how toread a cash flow statement or a
balance sheet or a profit andloss, that's totally fine.
Or a balance sheet or a profitand loss, that's totally fine.
And maybe you do know how toread them.
But how often are we actuallylooking at them and using them
to make educated decisions?
The problem we run into is onethey can be over our heads.
(02:34):
We are looking at this sheetand we're going awesome.
Okay, what am I supposed to dowith this balance sheet?
Yeah, sure, I'm getting someinfo off of it.
I have no idea what it means.
I have no idea what I should bedoing with it.
It's all retroactive.
Even if you could decode it andput it into action in your
business, it's retroactive.
What I mean by that is it'salmost too late.
(02:55):
You have no pulse on it.
If I wanna know what happenedthis month, it's probably going
to be middle of next monthbefore I can really see what
happened to the numbers.
That is too late to take anyaction.
At some point.
We need to have a way to lookinto our business today,
tomorrow, in this exact moment.
How am I doing financially?
What should I be doing in thisnext week or two to move the
(03:16):
business forward, and what can Ido financially to do that?
The key here, like I said, isbank accounts, so I want to walk
you through some core bankaccounts that we recommend Now.
The first few I have talkedabout multiple times.
We have a podcast all abouttransforming your practice using
the Profit First system.
I believe it was episode two orthree.
I would recommend going backand finding that and listening
(03:36):
to it.
I'm going to walk you brieflythrough the accounts, but this
system is really reallyimportant and implementing it
into your business is key.
So, after you finish thisepisode, go back to get deeper
context into some of these firstfive accounts that I'm going to
talk about Now.
The five accounts that we thinkeveryone should start with and
there's going to be more thatwe're going to add on to the end
(03:57):
are these five accounts thatwe're going to nickname income,
profit, owner's pay taxes andoperating expenses.
Income is an account that we'regoing to use to have deposits
drop into.
If you're using SimplePractice,stripe, paypal, whatever you're
using to collect payment, itgets deposited directly into
this income account and it justsits there.
(04:17):
We don't pay bills out of thisaccount.
We don't pay our team out ofthis account.
It is literally a holding placefor income.
Then on a weekly basis for meit's every Friday I log in and I
move money from income to eachof these other core accounts.
I have an account for profitbecause we prioritize profit and
we teach our practice owners toprioritize it.
This means that we take acertain percentage of every
(04:39):
dollar that comes in and we moveit directly into that profit
account.
We can use this account to payourselves bonuses.
We can use this account to payour team members bonuses.
We can use this to build upemergency savings, pay down debt
.
Whatever we wanna do, thisaccount is a priority.
We're gonna move a certainpercentage into profit every
time money comes in.
Then we're gonna have anowner's pay account.
(05:00):
That's you.
You're the practice owner.
We are going to prioritize you.
Too often, if we just have twobank accounts where we have one
business checking account whereeverything comes in and goes out
, we're left paying ourselvesscraps.
We see this time and time againBusiness owners paying
themselves scraps.
They are taking homeinconsistent pay.
They're taking home less thanthey ever did when they were
(05:21):
working for someone else and wewant to resolve that.
We want to fix that.
The way to do that is to have abank account purely dedicated
to your paycheck.
So we're going to nickname thatowner's pay and we're going to
put a percentage of every dollarthat comes in into that account
.
The next one we want is fortaxes.
We don't want to be stressingout at the beginning of every
year because we might have a bigtax bill due.
(05:41):
We want to be paying our taxeson time, consistently, whether
you're running it throughpayroll or whether you're
logging in quarterly to pay yourtax estimates.
We want to set aside cash inorder to accomplish this.
So every time money comes in, apercentage goes to taxes and
then the rest goes intooperating expenses.
We have a percentage going intoyour operating expenses.
Now, this is to pay your bills.
(06:03):
This is to pay any expensesthat you have subscriptions, any
services, any softwares,whatever you have.
Your rent to your office comesout of this operating expense
account.
So these are the five coreaccounts that we believe in that
we recommend.
This is all based on that bookProfit First.
That recommends these fiveaccounts.
(06:23):
Now, that said, it's kind ofgeneralized for all industries
and we are here to talkspecifically into therapy
practices, whether you're amental health therapist, a
physical therapist or somethingin that realm, your business
looks a little bit differentthan a lot of other industries.
Let's say, a marketing agencythat we might work with is going
to have a completely differentstructure.
(06:43):
They're not going to be dealingwith insurance.
They're not going to be payingteam members based on commission
or a flat fee for each sessionthey do.
So there's a lot of nuance thatcomes into it that we think
therapy practices should havesome additional bank accounts on
top of those core accounts thatI just outlined.
One that I think is incrediblyimportant is a payroll account.
(07:03):
We're going to separate outoperating expenses and payroll
into two separate ones.
Now, I'm not talking about yourpayroll, so you, as the
business owner, you're coveredin that owner's account.
We're talking about your team,your contractors or your
employees, your admin team, yourclinicians, your therapists,
(07:24):
all those people, your PTs,whatever you have on your team.
We are going to put theirpayroll into this one account.
One of the biggest stresses thatpractice owners face is whether
or not they will make payroll.
They are just reaming withanxiety around this.
They're looking at their bankaccount.
They're trying to do mentalgymnastics, financial gymnastics
in their brain of will I beable to make payroll?
(07:45):
This just ensures that thathappens.
It's prioritizing it.
So every time money comes in,we want to put a percentage into
that payroll account.
Now, the percentage is going tovary based on a lot of factors.
So if you do a commission split, so if every clinician who
works for you is taking 60%,well, that doesn't necessarily
mean 60% of every dollar thatcomes in is going in there.
(08:08):
Maybe you're seeing patients,maybe you have other things out
there, like courses.
So what I would recommend isgoing back and looking at your
profit loss statement.
I know I said those are thethings that we don't wanna use
to dictate short-term decisions,but this is gonna help you.
Big picture, look and see howmuch did we earn last year.
How much did we spend inpayroll.
(08:28):
So let's say you earned$100,000, for simplicity's sake,
and you spent 50,000 on it inpayroll.
Well, that means 50% of whatyou brought in went toward
payroll and that means ourpayroll.
Of what you brought in wenttoward payroll and that means
our payroll account.
We're going to be putting 50%of every dollar that comes in
into payroll.
This should work out andbalance itself out, and it's
something we want to keep apulse on every quarter.
(08:50):
So looking and saying, okay,how much was going toward
payroll?
Did we cover enough?
Is it increasing?
Is it decreasing?
Do we need to adjust thatpercentage?
Then we can make sure payrollis always covered, always taken
care of, no more stressing aboutthat.
Another account that I recommendhaving is one we would call the
vault.
It can also be called youremergency fund, your savings.
This is your safety net, yourcash safety net, so that, if
(09:15):
business goes down, maybe youhave one of those Decembers and
Januaries that is just rough.
You know, you got the holidayswhere a lot of clients are
canceling, a lot of yourclinicians might be out on
vacation.
You're out, and then you moveinto January where it's flu
season and suddenly you're like,okay, it's been 60 days and our
client numbers have been waydown, our session numbers have
(09:36):
been way down and you'restarting to stress and panic
financially.
Well, having a cash nest egg onhand like this is huge.
Now you could allocate apercentage every month into the
vault, which is perfectly fine,but you could also, like I was
talking about, that profitaccount is, as money accumulates
, into profit, at the end of thequarter you can take half of it
(09:57):
and move it down into thatvault.
So every quarter you're dumpinga large sum of cash into that
vault to build it up.
I recommend having about threeto six months of your operating
expenses in here, including yourpaycheck in that account.
How much do you need to payyour team, to pay the rent, to
pay your softwares and to payyou every month?
(10:18):
And then we're going tomultiply that by three to six
and keep that in that savingsaccount ready to go in case you
need it.
Another account that we thinkeveryone should have is a
training and coaching ortraining and development account
.
Investing in yourself is soimportant.
It's something that successfulbusiness owners do Now, whether
this is going to conferences,whether this is joining master
conferences, whether this isjoining masterminds, hiring
(10:41):
coaches, whatever it is that youare investing in yourself and
that you're prioritizing it.
So one to 2% of every dollarthat comes in, if you allocate
it toward training anddevelopment, it's easier for you
to make those investments whenthe time comes.
So let's say you meet with abusiness coach or a profit coach
, I don't know and you'retalking to them and you're
(11:02):
wanting to invest in thatprogram.
You're nervous about thefinances.
Having an account that isspecifically for that is going
to ease that tension, ease thatwondering of can I afford this
or not?
So having some money set asideintentionally to reinvest in you
as the business owner again, ifyou're going to be flying to
conferences, something that cancover your hotel, your flight,
(11:23):
the conference ticket, if you'rewanting to join networking
groups or mastermind groups oran online course, whatever it is
having cash on hand is going tobe huge.
In order to do that, all right,the next one I'm going to
recommend is if you have debt,so we would call this a debt
destroyer account.
This is going to help you paydown your debt faster.
Now, your operating expenseswill be covering any accruing
(11:46):
debt.
So if you have a credit cardthat you are rolling, let's just
say, meaning you are chargingall your subscriptions, all your
bills are being charged to thatcard, and then you're paying it
off at the end of the month,well, opex will still cover that
because that's your expenses.
So you're going to make sureyou're at least not accruing new
debt on that credit card.
And then you can have a debtdestroyer account where we maybe
allocate a few percentagepoints to that and then every
(12:11):
month, you take whatever's inthat account and you throw it
down to reduce that principalbalance on your debt.
Now there's a lot of ways totackle debt in your business,
whether it's the debt snowball,the debt avalanche, meaning
looking at interest rate.
Debt snowball will be smallestbalance to largest balance, debt
avalanche is the highestinterest rate to lowest interest
rate.
There's a lot of things toconsider, but I would say, just
(12:33):
look at your options.
We do have an episode as wellon getting out of debt in your
practice and a lot of thosedifferent strategies, so I'll
link that in the show notes ifyou want to go back and check
that out.
All right.
So, using an account to pay offdebt if that is on your goal,
if that's one of your goals forthe year, let's do that.
And then, finally, anotheraccount that I recommend is a
(12:53):
retirement account.
If you're trying to invest inretirement now as a business
owner, maybe you don't have a401k for your team, maybe you
don't have a retirement plan foryour team, but that doesn't
mean that you can't beintentionally setting money
aside to invest in that.
Now I have a completelydifferent business, which is my
music business, and in that one.
I have an account titled RothIRA and every time I earn money
(13:16):
from music, a certain amountgoes into that account and then
every month it gets investedinto my retirement.
So I'm intentionally settingthat money aside.
As a business owner, we see alot of times that people leave
their nine to five.
Maybe it's a corporate job orwherever they are.
Maybe they have a 401k plan orsome kind of retirement plan and
then they go into business forthemselves and suddenly five, 10
(13:39):
plus years go by and theyhaven't been investing in their
retirement, which is a hugeopportunity missed.
So we want you investing for thefuture, and having an account
where, again, you have a fewpercentage points set aside can
be huge.
Now what I would do is I wouldtake some of your owner's pay
percentage and set that asidefor for this retirement fund.
(14:00):
So let's just say you'reputting 40% into owner's pay.
Maybe you put 35% into owner'spay and 5% into your retirement
fund.
It really comes down tofiguring out your key
percentages.
Now, percentages can be tricky.
It's really kind of a challengeto go back One.
We want to go back and say whatpercentage have I been spending
(14:22):
, like I said, on payroll, onoperating expenses, what have I
been taking home, whatpercentage of that compared to
my revenue?
But also, where should I be?
What is a healthy percentage?
I can look at those things, butif I'm spending 90% on
operating expenses, that's nothealthy.
We wanna be able to get ourbusiness to a healthier place.
Now on our website we do have afree quiz that's gonna at least
(14:43):
help you pinpoint whatpercentages should you be doing
in your business with these bankaccounts.
So you're welcome to take thatfree quiz.
Just answer a few questions andit's going to send you a custom
report that's going to sayhere's what percent should be
going into profit, here's whatshould be going into owner's pay
, et cetera.
So go to our website.
I'll put that in the show notesas well.
Take that quiz to get someinsight into that.
We also have a team of coacheswho.
(15:05):
This is what we do.
We know the therapy industryincredibly well.
We work with a lot of practicesand we help them pinpoint.
Where am I today?
What where?
Where am I financially?
What does my business look likeright now, percentage wise,
where should I be and how can Iget there?
So we give you that snapshotand we walk with you and guide
(15:27):
you through this whole process,because what we've learned is
most people wouldn't considerthemselves money people.
They get overwhelmed by it orthey just have so many balls
they're juggling right now intheir business that this is
something that is incrediblyimportant but has just gotten
pushed to the back burnerbecause of all the other things
that you're doing.
I highly highly recommend youschedule a call with one of our
(15:49):
coaches to get some helpfiguring out where your business
is now and figuring out how toget to that best place you can
possibly be.
It is one of those working withour team.
Yes, there's an investment, butit is one of those things where
you get that investment backbecause we are saving you money
by showing you exactly how tocreate that system.
So there's always a link in ourshow notes to get connected
(16:11):
with one of our coaches.
I highly recommend you takeadvantage of that.
All right, these are theaccounts we should have.
If you are using a bank that hasfree accounts, then I would say
there's make, make use of it.
There's really not a limit towhat you can have.
If there's something you'retrying to do, if you're saving
for a building or an employee,open an account for those things
.
If you have a bank that chargesyou for every account that you
have open, I recommendconsidering switching to one
(16:33):
that has free checking businessaccounts or checking free
savings accounts for businesses.
So there are a lot of creditunions out there.
Relay Financial is one that wehighly recommend to therapy
practices.
It's an online business bank.
They work really well, withProfit First, so you can
automate those transfers in yourbank accounts.
(16:53):
You can add bank accounts injust a couple minutes by hopping
into your account and you canadd, I believe, up to 20
accounts right now.
So Relay is fantastic.
We will drop a link in the shownotes to that as well.
So lots of links coming at youtoday Fantastic.
We will drop a link in the shownotes to that as well.
So lots of links coming at youtoday.
So finding a place that hasfree checking accounts is going
(17:13):
to be vital in order to reallyhone in on managing your cash
flow.
Thanks for joining us on theTherapy Business Podcast.
Be sure to subscribe, leave areview and share it with a
practice owner that you may knowIf your practice needs help
getting organized with itsfinances or just growing your
practice.
Head to therapybusinesspodcomto learn how we can help.
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