A couple months ago I got a call I’ve gotten a hundred times.
“Hey man… payroll is tomorrow… and I think we’re about to be short.”
I asked what their balance was.
They told me the number and added, “We were fine on Friday.”
So I asked the question that always makes it click:
“Okay. What’s scheduled to clear between now and payroll?”
Long pause.
Then it started coming out, one item at a time.
- “We have a tax pull that hits Monday.”
- “There are a couple big checks we cut last week.”
- “ACH clears over the weekend.”
- “And payroll is already in the queue.”
Friday looked calm. Tuesday looked like a fire.
Nothing “bad” happened in the business. They just got surprised by money that was already spoken for.
That’s the whole problem with running your business off the bank app.
When you live through that whiplash a few times, you start looking for a system.
And one of the most popular systems business owners hear about is Profit First.
If you haven’t read it, here’s the simple version:
Instead of operating out of one checking account and hoping profit is left over, you set up multiple bank accounts (profit, owner pay, taxes, operating expenses) and you move money into those buckets by fixed percentages.
It’s attractive for one reason:
It forces you to treat profit like a decision, not an accident.
That’s a big upgrade from “whatever’s in the account must be spendable.”
THE PROBLEM (PROFIT FIRST, I’M TALKING TO YOU) AND THE SIMPLE FIX
Here’s where Profit First breaks for a lot of owners.
Most business owners are already struggling to manage one bank account well.
Profit First hands them five or six accounts to manage instead.
For some people, that structure works.
For a lot of others, it turns into a second job: transfers everywhere, balances nobody fully understands, and the same confusion, just spread across more places.
And if you stop doing the transfers for even a couple weeks, it falls apart fast.
So the system isn’t “wrong.”
It’s just not sustainable for the average owner who already has a full-time job running the business.
What’s actually true:
Your bank balance tells you one thing: How much cash is sitting in an account at this exact moment.
It does not tell you how much cash is actually available to make decisions with.
Because a big chunk of that cash is already spoken for.
Payroll is already committed.
Taxes are already committed.
Bills you’ve already approved are already committed.
Transfers, checks, and ACH that are already “in motion” are already committed.
So when you look at the bank balance and treat it like the decision number, you’re not doing cash management.
You’re doing what I call bank balance accounting.
The fix (without the account maze):
Here’s the number you actually want:
TRUE CASH POSITION = BANK BALANCE – COMMITTED CASH (NEXT 7–14 DAYS)
This isn’t a forecast or financial model. Not a huge spreadsheet with 10 sheets you babysit.
Just a snapshot that answers the only question that matters: “What cash is actually free to use after everything already in motion hits?”
If you’re running a service business, this is the difference between:
- “We have money.”
- “We have money after payroll clears and taxes hit.”
Those are not the same statement.
A SIMPLE SYSTEM THAT WORKS (SHORT OF A 13-WEEK CASH FORECAST)
A 13-week cash flow forecast is great. It’s the steering wheel.
But if you’re still getting surprised by payroll, you don’t need a steering wheel first, you need headlights.
The simplest “headlights” system I’ve seen work is a weekly report sent by accounting.
Think of it as your Weekly True Cash Position Report.
Here’s what it includes:
1) BANK BALANCE (AS OF DATE/TIME)
Just facts. Which accounts. What time.
2) AR SNAPSHOT
Not a fantasy.
A real list of what’s outstanding and what’s overdue.
3) AP + PAYROLL + TAX COMMITMENTS (NEXT 7–14 DAYS)
- payroll date and amount
- taxes due before the next report
- bills due before the next report
4) OTHER COMMITMENTS (WHAT’S SCHEDULED?)
If it’s on the calendar, it’s real.
Debt payments. Insurance. Rent. Planned owner draws. Big vendor payments you already agreed to.
5) TRUE CASH POSITION (THE DECISION NUMBER)
Bank balance minus everything above.
That number is what you decide from.
Not the bank app.
—
When you run this weekly, you stop getting surprised by payroll, taxes, and previously committed money.
You stop “accidentally” spending money that was never actually free and you stop making urgent decisions based on fear.
You start making intentional decisions based on reality.
WHAT TO DO THIS WEEK
Have accounting send the first Weekly True Cash Position Report.
Don’t build a monster spreadsheet and try to make it perfect. Don’t turn it into a huge project.
Just start with what you know. Over the course of weeks, add to it, but push back from making a half-day project.
Just run it every week until it’s boring, then keep running it week after week after week.
It’s time to stop asking, “How much cash do I have?” and start asking, “How much of this is already spent?”
