Are you using a Square Savings Account?

[HC_Charlie]

 

Hey Square Sellers! I just wanted to share how I made the first step towards a New Years Resolution....increasing cash flow and making my business more profitable! Wanna know the first step I took today?....

Well last year I opened a Square Savings Account, thinking how nice it would be to take advantage of the auto saving feature. But I never took the first action to make this work to my advantage. I knew I wanted to NOT have to worry every quarter when my State sales tax came due for my retail store. I know I should have been putting that money aside I collected for sales tax; it wasn't really mine to keep or part of my store's profits. Some quarters of the year I had enough in my savings or checking account to cover remitting the sales tax, but some quarters I had to dip into some other funds to cover it. But here's the really cool part...this coming First Quarter of 2023, I'm not going to have to worry about it! Why?....

I went into my dormant Square Savings Account, and created a new folder that will automatically take a percentage of my Square sales, and hold it for me in that Savings Account. (I used my State's sales tax % and then added a few more % to cover any cash sales, so I should have enough to pay when it's due.) Quick and easy peasy! So when it comes time to pay the sales tax on my store's retail sales, I'll just have to transfer the money out of that special folder into my checking account and write the check (or electronically transfer to your State if you have that option.)

I won't even miss that money, and by taking it right off the top and saving it away until later, I don't have to worry about! Here's to a more organized business with better cash flow this year. (and hopefully more profitable too!)

What's your plan to help save for your business expenses in 2023? Let me know in the comments...

[WristWars]

Completely agree!! Although I don't have mine set for auto transfer, it is specifically for taxes from my sales at markets. 

[mksavage]

I love this! I feel like I'm still emerging from the post-holiday fog, and really eager to sit down and think through strategies like this. Thanks for kickstarting the thought process! I do automatic saving in my personal life, but have never really considered it for my business - interesting idea! 

[Anthem]

I love this idea @HC_Charlie. While I do a similar thing by managing my business with 5 different accounts at the bank level I do love the idea of grabbing some of the top and keeping it completely separate. I'm thinking I may try to use this as a staff reward fund. I'll carve out a percentage and each quarter jump in and see what has built up to throw a little bash for the group. We do this anyway but always pull from the general fund. The savings would guarantee the money has been set aside and create an instant budget to work from. We've found these little gatherings have been instrumental in employee morale, and relational connections. A happy byproduct is that our customers always have high engagement rates with the pictures we post from these events. 

Great idea! Thank you for taking time to share. 

[mksavage]

@Anthem Ooh, love the idea of a fund for staff care/reward! We don't do those kinds of gatherings as much as I'd like, but having some already set-aside money would remove one barrier... great idea!

[HC_Charlie]

@AnthemLOVE the idea for an employee fund like this! Awesome way to reward your staff. I wonder if they knew you were doing this, if maybe it could increase sales and engagement (if employees knew a percentage were going toward this "party" fund) ?

[Anthem]

That's an interesting look @HC_Charlie. They've come to know something is coming but we've never explained the correlation between the grandness of the event to the sales in the previous time period. This might be something fun to explore. 

[Greenmonkey65]

I recommend all business owners read Profit First by Mike Michalowicz. Our coach helped us set this up. First, it helped us understand what expenses were making us money and the ones that we could get rid of! We found over $20k of costs that we erased from our P&L statement.  The premise is similar to what Charlie started with his Sq savings account.  We have six bank accounts for different categories: Inventory, Payroll, Operating, Taxes, Main Account, and most importantly, Profit!

[HC_Charlie]

Thanks @Greenmonkey65 for the book tip...I"m trying to read more this year and this sounds like a great one!

[Lovewell]

@HC_Charlie It's a must read! It completely changed the way we looked at our finances and running business has been SOO much smoother because it! Highly recommend!

[HC_Charlie]

@LovewellAGREE! I just started reading/researching the Profit First idea (method) and began planning to implement it Feb. 1. I'm totally excited about it and I think it will really propel my business into the next stage. I've watched and read other biz gurus before but was never really excited about what they were saying, but this one makes total sense for me.

For anyone else curious about "Profit First", I found this video helpful. It's long but really beneficial and sometimes entertaining LOL. https://www.youtube.com/watch?v=X_ewZ-Ni3EA

[scoutodin]

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@Greenmonkey65 wrote:

I recommend all business owners read Profit First by Mike Michalowicz. Our coach helped us set this up. First, it helped us understand what expenses were making us money and the ones that we could get rid of! We found over $20k of costs that we erased from our P&L statement.  The premise is similar to what Charlie started with his Sq savings account.  We have six bank accounts for different categories: Inventory, Payroll, Operating, Taxes, Main Account, and most importantly, Profit! 😎

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Thanks For This tip Bro it's Very Helpfull For My Hunting Product Related Business..

[sugarlab]

I have a couple of different folders set up in Square Savings. One is an automatic savings, I think I'm doing 2% of daily sales. Then we have one for wedding payments. We get wedding payments months before we actually need to use the payments to buy ingredients or labor, so we set aside those payments (and make a little bit of interest on them). And then I have a third savings account for the creator payments I get from Instagram and TikTok. I like to put them aside since they're "extra" money. Not sure what amount I'm waiting for but it's fun to watch that grow. 

[Blackring]

Hello there, 

I own a distillery, so taxes are always a chore ( every month! ) I do love square because it helps me keep track and makes reporting way easier. Also I love all of the additional free services I keep finding. I will keep it for sure. 

Heather

Black Ring Spirits

[Doran]

I love my Square Auto savings.  Sales tax, end-of-year bonus, and a few renovation projects are all folders I'm using right now.  

[RissHairLLC]

It would be nice if square offered BUISINESS saving accounts. As an LLC i am not able to move money from my business to a personal savings account with out incuring taxes. I loved the auto savings aspect, but could not use becasue of that reason. 

[bicyclerepair]

I need to use that same feature for sales tax this year. I am not good at saving money for sales tax because I spend money too much 😂

[Lovewell]

I love the tax feature on the dashboard. At the end of each week I take the sales tax amount and deposit into our tax account. We have been using the Profit First techniques for almost 2 years and have seen a dramatic improvement in our spending, saving and the way we operate. 

I love knowing that the funds I need for sales taxes is there and all I need to do is make the payment. 

@Anthem I am intrigued by your staff fund that some of you have going. How does it work? Do you take a percentage or do you just drop money in at random intervals? 

We try to do something for the staff each quarter. It would be helpful to have a bit of money tucked away for that. 

Cheers. 

[Anthem]

@Lovewell We currently set aside 1%. Just switched this week to having square pull it out and put it in a savings account. Prior to this switch, it was been a bucket in an excel spreadsheet, and part of the general operating fund. Early on, I tried using the general fund, but like the multiple accounts discussed on this thread, committing a specific amount means the budget is set, and now we get the fun job of figuring out how to spend it by making a big deal of the folks that do the work that makes it all happen. 

We use the amount for staff events, holiday parties, etc. Throughout the year, we host occasional pizza parties, and holiday decorating events. We feed the staff when we do community cleanup projects or special cleaning days in the shop. We also use it as a gift fund when we want to reward a team member for some reason.

We used to do special things on a consistent (annual basis), anniversaries, birthdays, and training achievements, but I find the staff begins to look at them as entitlements, they started expecting them. That isn't the point so we do things more randomly now and mostly through group efforts that build community across the staff or creates deeper connections with customers. 

With a budget of nearly $10k, we are able to stretch the dollars a long way for projects like this and a staff of 20. 

[Stacelyn24]

So I actually just set up this feature for my bf's business.  I watched as his savings account grew and he didn't even miss the money that was being put to the side.  Another feature that I love about Square Savings account is that you earn compound interest with it being a APY over an APR account.

With that being said...I'm sitting down this week and creating one for my business and delegate a few folders for us.  One being for our taxes, others for supplies, continue education, advertising/marketing...etc.

I think the auto feature makes this most attractive 🙂

[Bronze_Palms]

That is a great idea! Thank you for sharing this!!

I run a service-based business so we don't do a ton of retail sales but even if I move 3% of total sales over to a separate account, I wouldn't have to worry about paying sales tax, corporation tax, etc at year end! I will have to set this up!

Does it cost to use it btw?