What percentage of your revenue should go to expenses, taxes, and profit?
Here is something I see with Utah small business owners all the time: you are bringing in solid revenue — your phone is ringing, your clients are happy, your schedule is full — but at the end of the month, you are left wondering where all the money went.
That stress is not a cash flow problem. It is a clarity problem. And the fix is simpler than you might think.
One of the most powerful things you can do for your business right now is start thinking in percentages. When you know where every dollar is supposed to go — before it hits your bank account — you stop reacting and start making intentional decisions. That is what we help business owners do every day at Clarke Financials, right here in Utah, using QuickBooks Online.
The three buckets every business owner needs
Think of your revenue as being divided into three categories. These are not hard rules — your numbers may look a little different depending on your industry and stage of growth — but they give you a structure to build from.
Bucket 1
Expenses — 40 to 60 percent of revenue
This covers the cost of running your business: software subscriptions, QuickBooks Online, marketing, contractor payments, equipment, and anything else that keeps the lights on. If your expenses are eating more than 60 percent of what you bring in, that is worth a closer look. You may be spending on tools or services that are not actually moving the needle.
Bucket 2
Taxes — 20 to 30 percent of profit
This one catches a lot of Utah small business owners off guard, especially if you are self-employed or running an S-corp. Set aside 20 to 30 percent of your profit into a separate savings account every time money comes in. Do not wait until April. When tax season rolls around, you want to write that check without stress — not scramble to find the funds.
Bucket 3
Profit — 10 to 20 percent of revenue
This is what you actually keep. Profit is not a bonus — it is the point. It is what allows you to grow your team, invest in better tools, weather a slow month, and pay yourself like a business owner instead of an employee. If your profit margin is consistently below 10 percent, your books are trying to tell you something.
What this looks like in real numbers
Say your business brings in $8,000 in a month — a number that is very common among the service-based business owners we work with across Utah. Here is a simple way to think about it:
Expenses
$3,200–$4,800
40–60%
Tax reserve
$640–$960
20–30% of profit
Profit
$800–$1,600
10–20%
When you start looking at your money this way — with every dollar having a purpose — the financial decisions that used to feel stressful start to feel a lot more straightforward.
Your books should be telling you this every month
Here is the thing: these percentages are only useful if your books are clean and current. If your QuickBooks Online account is behind, miscategorized, or a mystery you are avoiding opening — you do not actually know what your real numbers are.
That is where professional bookkeeping changes the game. When your financials are accurate and up to date, you can pull a report and actually see your expense ratio, your profit margin, and whether you are on track. No more guessing. No more anxiety at tax time.
Ready to know your real numbers?
At Clarke Financials, we work with service-based small business owners across Utah — from trade contractors to med spas to real estate investors — helping them get their books organized in QuickBooks Online so their numbers actually mean something. If you are at the point where you know outsourcing your bookkeeping makes sense, let's talk.
