profit first banking

What is Profit First and Why Should Bankers Care

For many years now, the banking industry has been struggling with providing a personal touch experience for customers especially with all of the artificial intelligence being used. Furthermore, online banking services, and ATMs have nearly taken all of the personal customer care out of banking.

Personal Touch Matters To Business Owners

Today more than ever, it’s easy to switch banks. With similar product offerings and a general lack of personal touch, there is no reason a customer would be loyal to any given bank. Yet, those banks that make an effort to offer something that will build trust with their small business clients will keep and attract more of them. That’s because small businesses are still looking for personal attention from their local Banker.

“Building strong relationships with customers has been paramount for success in the financial services industry for decades,” said Steve Chaouki, executive vice president and head of the financial services business unit at TransUnion. Furthermore, he encourages “Arming them with more information can help them make smarter financial decisions.”

My question to every banker is:

What are you offering your business clients that would make them more likely to stay with your bank and refer clients?

Cash Management Tools That Drive Loyalty

Bankers can now offer a cash management solution to their customers that would enable their customers’ businesses to become more profitable and keep more money in their bank accounts. This method of cash management is called Profit First. If you have not heard of Profit First, it is a cash management system that Accountants, Bookkeepers and Coaches who are Certified Profit First Professionals implement with entrepreneurs.  The aim of this system is to to eradicate entrepreneurial poverty. In a nutshell, this cash management system teaches business owners how to put profit in their accounting first.

To make this new cash management system work, when we implement Profit First with a business owner, we advise them to go to their bank and open up to four additional bank accounts. If they go to their bank and their Banker tells the business owner that they have to pay for each one of these accounts and cannot understand why they would want to open up these accounts, the customer will go down the street to another bank where they do understand Profit First and why they need these additional accounts. Every Profit First trained entrepreneur knows they can keep looking for a bank until they find one that won’t charge for each account they want to open.

How Profit First Bank Accounts Work

In addition to their operating bank account, the additional accounts that we suggest our clients open are:

  • income account,
  • profit account,
  • owners pay account, and
  • tax account.

The reason that we suggest all of these additional accounts is to divvy up the money that comes into the income account for our clients and allocate them to specific bank accounts that have specific reasons.

For example, if a company makes deposits of $10,000 within the first 10 days of the month we set up an allocation percentage for each of the accounts of that money to be allocated into. For example, we may advise the client:

40% of their revenue should be going to their operating account,
15% should be going to their owners pay account,
15% should be going to their tax account, and
30% should be going to the profit account.

This way each time the customer logs into their online banking or banking on their phone they can see exactly what is in each account and what each accounts purpose is for.

Customers who have implemented Profit First have become more profitable from day one. This brings clarity to their business and to their cash management.

What Bankers Need To Know About Profit First Bank Accounts

What Business customers need from their bankers is the understanding of the multiple bank accounts and what their purposes are for. They need their Bankers to be able to offer them a solution on how to keep five bank accounts without incurring additional fees. We all know that there are bank accounts with minimum balances and transfers and additional banking features that can keep these fees low. What we need is the banker to understand the client’s needs and to work with them best to keep these fees down even if they have low balances. Their profit account and the tax account will only have two transactions every month therefore can be savings accounts. The only accounts that need to be checking accounts are the income account and the operating account and perhaps the payroll account but not necessarily.

When Customers Profit, Banks Profit

If Bankers were aware of this new way of helping their business clients the business clients would stay with their bank or flock to their Bank knowing that they are a “Profit First friendly” Bank and this would enable the banker to have more deposits at their Bank offer additional products like payroll, merchant accounts, retirement account and any other banking products that they could possibly sell to their clients. Before you can sell additional products to a business customer you have to become their advisor. It’s time to get more personal with your business clients and let me show you one of the ways that you can do that to become more profitable right alongside your business clients becoming more profitable.

I want to help small businesses to become more profitable, and their banker should too. Let’s talk about how we can support your organization to become profit friendly. Book a complimentary time on my calendar here.


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  1. […] across the United States are utilizing the Profit First Cash Flow Management Tool (over 100,000 and growing every day). To properly use this amazing cash flow management tool, they […]

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