How to set up SUPER SIMPLE business?

First-time YNAB user. I am trying to use it for my business, IN THE MOST SIMPLE WAY POSSIBLE.

My greatest need to ensure that I'm setting aside enough cash, monthly, to fund a pension and tax payments, annually and quarterly.

Most all the business income comes from one source in a single monthly payment. I'm not interested in linking my checking account as I'd rather just work with these numbers:

Opening balance (then single monthly deposit)

Owner's salary

Federal tax

Pension

REGULAR expenses

Remaining cash flow

My monthly business expenses are minimal and mostly recurring, so just treating "expenses" as a single category will work for me. Especially because I'm not trying to manage them, but rather ensure only that I'm holding enough to fund pension and tax liabilities. I envision the "Remaining cash flow" (or something similar) to be the one-look indicator of how I'm doing towards meeting obligations. 

QUESTION: What's the best way to set up the above and what are the monthly actions needed to make it work? I've searched the forum and read many helpful articles, but seem to be stuck on either vocabulary or action steps. Which do I "budget," which do I "reconcile"? 

Happy to do more reading if that's a good step. Happy to pay for some quick counsel as well.

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    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 1 yr ago
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    You budget the income (enter transaction line in the account, leave it as tbb, then go to the budget and split it among your categories). You reconcile the accounts, that is see what's cleared the bank and if the cleared balance equals the bank balance. 

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    • Ben K.  Thanks. I'll start there.

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  • The IRS requires you to categorize your business expenses, so having them in a single category won't work at tax time, unless you're also using separate bookkeeping software.

    I would start by taking some of the free online classes available through YNAB's website. There's no inherent difference between a business and personal budget; all of the principles and procedures are the same.

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    • mamster ZERO interest in tracking business expenses with YNAB. ONLY interested in ensuring annual pension and quarterly tax obligations are funded. Thanks for the recommendation for online classes. 

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  • Hi Snerdly Bosco !

    It sounds like you have a pretty good map for what you want your business budget to be! :)

    To get it set up, you'd add your checking account (you don't have to connect it to your bank, but you need to add the account so that YNAB knows the amount of funds you have in your budget), then add categories for the expenses you mentioned (Owner's salary, Federal tax, Pension, REGULAR expenses, Remaining cash flow). You'll use the money in your account, to budget for the categories you've created.

    If you plan to pay yourself $500, budget $500 towards the "Owner's salary" category. Then, enter a $500 transaction in the Checking account and categorize it as "Owner's salary" - that will update your checking account balance and remove the $500 from the category. For longer term savings, like Federal Tax, you can create a Goal if you want to save a certain amount. :)

    You can also check out this article on how to set up a business budget if you'd like to include accounts receivable. 

    We have a number of other articles on using YNAB for business, and I'll leave them below in case you'd like to look them over, but they may be a bit more complex than what you'd like. 

    Keep in mind that they were created based off of our previous version of YNAB (YNAB 4) so you won't recognize some of the screenshots. The information is all still relevant, though! 

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  • hi how do you track what you owe to suppliers ?

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