My accountant friend in Denver convinced me to stop mixing business and personal cash

We were grabbing a beer and he flat out asked how much I spent on my car payment from my business account last month. When I said $400, he showed me his own books where he pays himself a set salary every Friday, no matter what. He said mixing funds makes tax time a nightmare and blurs your real profit. Now I'm trying to set up a weekly transfer but figuring out the right amount is tricky. How do you guys decide what to pay yourselves each week?

3 comments

3 Comments

zarakim29d agoMost Upvoted

What's your average monthly profit after all business costs?

henrycooper29d ago

Used to just pull cash when I needed it. Your friend's right, paying yourself a set amount is the only way to see what you're actually making.

perry.evan28d ago

My old bookkeeper in Austin got me on a 25% rule years ago. Every Friday I transfer 25% of that week's net profit into my personal account, which covers taxes and gives me a paycheck that actually follows how the business did. It took a few months to smooth out the highs and lows, but now I always know where I stand. How did your friend figure out his set salary amount?