Diane GardnerFounder, Adept Business Solutions · Profit First Professional

Profit First Myths| Profit First Is An Accounting System

17 May 2021 · 1 min

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In this myth‑busting video, Mike Michalowicz clarifies that Profit First is not an accounting system but a cash‑management tool designed to channel business owners' behavior. He explains that Profit First operates through separate bank accounts that sit alongside any existing accounting software, linking via the company’s general ledger. The system adds these bank accounts, allowing owners to see and manage cash directly without altering their current accounting processes, thereby acting as an umbrella over the accounting system rather than replacing it.

Chapters

I'm Mike Michalowicz, the author of Profit First, and I'm doing a series of videos to bust Profit First myths. One myth is Profit First is an accounting system, and I don't want to replace my accounting system. Profit First is not an accounting system. What Profit First is, is a cash management tool that manages and channels human behavior. We set it up at your bank. In fact, it acts like an umbrella, if you will, with or or over your accounting system. It links in through your general ledger. So whatever accounting system you have, if you have a general ledger, and you do, we simply set up the additional accounts to reflect the bank accounts that Profit First has set up. Then you can log into your bank account and manage money like you likely do, see what money's there and make decisions. It'll connect to your accounting, it'll work seamlessly, and your accounting won't change whatsoever.