How to Use Relay for Profit First Accounting

If you’ve heard of Profit First, you know it flips the traditional accounting model on its head:
Profit = Sales – Expenses becomes
Sales – Profit = Expenses.

The method, made famous by Mike Michalowicz, focuses on allocating money into multiple bank accounts—so you always pay yourself first, save for taxes, and keep spending in check.

And while most banks make this process messy (or downright impossible), Relay makes it easy.

Here’s how to implement Profit First accounting using Relay—with less manual work and way more clarity.

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💰 What Is Profit First (Quick Recap)

Profit First is a cash management system that helps you control spending, boost profits, and stop living invoice to invoice.

It works by dividing your income into purpose-driven accounts:

1. Income
2. Profit
3. Owner’s Pay
4. Taxes
5. Operating Expenses (OpEx)

You then allocate percentages of each deposit across those accounts twice per month (usually on the 10th and 25th).

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🏦 Why Relay Is Built for Profit First

Relay is one of the only business banking platforms that supports Profit First natively—with up to 20 checking accounts, all free.

Benefits include:

• Open multiple accounts with zero fees
• Nickname accounts for Profit First categories
• Automate transfers between them
• Visualize where every dollar is going
• Avoid “mental accounting” and hidden spending

Traditional banks can’t do this without workarounds. Relay does it in minutes.

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🧰 Step-by-Step: Setting Up Profit First in Relay

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✅ Step 1: Create Your Accounts

Inside your Relay dashboard:

1. Create the following accounts:
   • Income
   • Profit
   • Owner’s Pay
   • Taxes
   • Operating Expenses
2. Optionally create more:
   • Marketing
   • Emergency Fund
   • Contractors
   • Team Bonuses

Relay lets you open up to 20 accounts under the same business — all FDIC-insured, with no added fees.

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✅ Step 2: Route All Revenue Into Your Income Account

Use your Income account as the central hub. This is where all client payments, Stripe deposits, or PayPal transfers should land first.

From there, you’ll allocate funds across the rest of your Profit First accounts.

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✅ Step 3: Choose Allocation Days (10th & 25th)

Every 10th and 25th of the month:

• Check your Income account balance
• Distribute the funds into other accounts by percentage

Example:

• 5% → Profit
• 50% → Owner’s Pay
• 15% → Taxes
• 30% → OpEx

You can schedule these transfers inside Relay using auto-transfer rules to reduce manual effort.

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✅ Step 4: Spend ONLY From OpEx

Here’s the key: You only spend from the OpEx account.

Need to pay a contractor? Use OpEx.
Buying software? Use OpEx.
Running ads? Yep—OpEx.

This keeps your tax money, profit, and pay untouchable until they’re truly needed.

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🔄 Automating the System With Relay

Relay lets you schedule recurring transfers, so you don’t have to log in and shuffle money every week.

You can also:

• Assign team debit cards tied to specific accounts (e.g. OpEx or Marketing)
• Track account balances visually
• Use virtual cards to manage specific expense categories (like ads or software)

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📈 Real Business Example

Maria, a freelance copywriter, uses Relay like this:

• Clients pay into her Income account
• On the 10th and 25th, she allocates:
  • 5% to Profit
  • 50% to Owner’s Pay
  • 15% to Taxes
  • 30% to OpEx

She pays bills and subscriptions only from OpEx. Taxes are ready when needed. Profit gets withdrawn quarterly as a bonus.
And she finally sleeps well.

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🔐 Is It Safe to Split Money Like This?

Yes. All Relay accounts are:

• FDIC-insured up to $250,000
• Managed under one EIN (no separate paperwork)
• Accessible in one dashboard

You’re not spreading money across different banks—just organizing it smartly within Relay.

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Final Thoughts: Profit First + Relay = Control, Clarity, Growth

If you’re serious about growing a profitable business, you need a system—not just a spreadsheet.

Relay makes Profit First easy to implement, maintain, and stick with. No fees. No friction. No forgetting where your money went.

So stop guessing. Start allocating.
And use Relay to put your profit first—where it belongs.