![]() ![]() She also mentions that before she had made the income account, she would just look at the cash in her business account at the end of the month and pay herself based on what she had left and what she could afford. This may seem fairly obvious, that the last account she uses to transfer money and pay herself is a personal checking account to pay herself a salary. You can also choose to make quarterly tax payments, which you’ll be saving more of that money as you earn it. “It’s important to have a tax savings account so come tax time when your accountant tells you what the damage is, you’ll have enough cash saved to pay the bill.” stated Paco De Leon. Next she set up a tax savings account, where she transfers money to save for payroll and income taxes. Some of the expenses the lists that she pays each month from this Operating acct include: Of which she uses to pay all of her company’s business expenses from this account except for her personal salary. She explained how she changed her old business checking account into an operating account. Operating expenses are typically divided into several categories such as payroll-related expenses, administrative or overhead expenses, and sales and marketing expenses. Operating expenses, or OPEX for short, are the costs involved in running the day-to-day operations of a company they typically make up the majority of a company’s expenses. 1 Operating Expense Account, or OPEX Acct Let us dive a little deeper into what these other accounts mean. She states in her article that also setup 3 other accounts, where then she disperses or transfers the income to: It only has one job: To be the checking account where all the income you earn gets deposited.Įach week, she reviews all of her deposits and transfers funds from her income clearing account to her other accounts accordingly. So according to Paco De Leon, “an income account is a checking account that acts as a clearing account-a place where money gets deposited and then transferred out to other accounts. She said that her business was not profitable and in 2017 she opened up a new checking account for her business and she called it an “Income Account’. Let’s break down her weekly budgeting strategy exercises and see how it could help other small business owners and solopreneurs to manage their finances better. Recently I came across an interesting article published by Gusto payroll, written by a small business owner named Paco De Leon, where she discussed a budgeting strategy she used to increase her company’s profitability by 132 percent, (she says). ![]() Project all costs to starting and running your business ![]()
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