Structurally how do you set up your accounting or your financial model? In my business we have four primary accounts. I'm going to go through each one of them.

Operating Account

We have a primary operating account. That is where the rent money comes in and the bills and expenses are paid from. That is your fairly traditional checking account statement. We try to reconcile that account at least once a week, if not two or three times. Early in the month when all the rents are coming in we reconcile that a lot.

Payroll Account

We have a payroll account. If you have staff and you have any sort of payroll, I do recommend that you set up a separate payroll account. If you use a payroll service like ADP they would go in there on the payroll days and they would grab the money for the payroll. You would have to fund that every two weeks. We keep the payroll account separate. I think most people think it's a smart idea to keep your payroll account separate.

Petty Cash Account

We have a petty cash account. If any of my employees need to go buy some small supplies, maintenance or something of that nature, we give them checks from our petty cash account. We only fund the petty cash account when we know there's an expense.

If I know a guy has to go down and buy $100 worth of supplies, we would then fund that account with $100. That way we don't have to worry about my employees stealing or anything of that nature. We only fund kind of what we know is going to happen. It's a nice way to avoid having to deal with some things. They can just go write a check on a small basis.

Savings Account

The fourth account is really a savings account. That is the security deposits. You really need an escrow account that bears interest at a financial institution that's FDIC insured and things of that nature. Most states are going to require that you have your security deposits in an account of that nature.

One thing is don't co-mingle money back and forth. Payroll should be payroll. Operating should be operating. Petty cash and securities kept the same way. Make sure you keep each and every one of these in their separate accounts and you don't co-mingle monies. If you start doing that you're really going to hav