Profit First Myths| Profit First Is An Accounting System

17 May 2021 · 1 min

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In this video, Mike Michalowicz, author of Profit First, debunks the myth that Profit First is an accounting system. He clarifies that Profit First is a cash‑management tool designed to sit alongside any existing accounting system. It operates through a set of bank accounts that act like an umbrella over the accounting records, linking to the general ledger so that the underlying accounting software remains unchanged. By structuring bank accounts to channel cash flow, Profit First influences human behavior and decision‑making without replacing the core accounting system.

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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, 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 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.