Page 25 - Improved +Example+Assessment+Report (LG Accrual) {FlipBook Test v1}_Neat (Online upload)

Suggested Bank Account Setup (on initial implementation)

• Income account (checking account at your current bank)

• Sales Tax account (savings account at a separate bank)

• Profit account (savings account at a separate bank)

• Owner’s Pay account (checking account at your current bank)

• Tax account (savings account at a separate bank)

• Operating Expenses account (checking account at your current bank)

In the future we may also look to open up the following Accounts:

• Vault account (optional - savings account at a separate bank) {this could be used for
longer term savings for personal use, or ‘special projects’ for use within the business}

The diagram on the following page shows a graphical representation of the outline basis of allocation:

st
1 Phase:
➢ Clients pay money due into your ‘Income Account’
➢ Funds sit in the Income Account until the nominated distribution date(s)
➢ Distribution 1 is from the Income Account to the Profit Account
➢ Distribution 2 is from the Income Account to the Owner’s Pay Account

➢ Distribution 3 is from the Income Account to the Tax Account
➢ Distribution 4 is from the Income Account to the Sales Tax Account (if applicable)
➢ Distribution 5 is from the Income Account to the OpEx Account

nd
2 Phase:
➢ Distribution 1a is from the Profit Account to the Profit Hold Account
➢ Distribution 3a is from the Tax Account to the Tax Hold Account
➢ Distribution 5a is from the OpEx Account to clear Debt (if applicable)

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