The 10/25 Cash Flow Rhythm
Replace panic-driven bill paying with a twice-monthly rhythm
The 10/25 Cash Flow Rhythm replaces the chaotic, anxiety-driven practice of bank balance accounting with a structured twice-monthly cadence for managing all business cash flow. On the 10th and 25th of every month, you perform your allocations (distributing Income account funds to Profit, Owner's Comp, Tax, and OPEX accounts based on your PTRs) and pay all bills due for that period.
This rhythm works because it leverages the habit loop identified by Charles Duhigg: a cue (the calendar date), a routine (allocations and bill payment), and a reward (clarity about your cash position). Instead of checking your bank balance in a panic whenever a bill arrives, you know exactly when money will be allocated and bills will be paid.
The rhythm transforms cash management from a reactive stress response into a proactive discipline. Over time, you develop an intuitive sense of your business's financial pulse, much like a heartbeat creates a steady, predictable rhythm rather than random, panicked pumps.
- When you're lost, speed is not your friend; slow down to a manageable rhythm
- A rhythm leads to a habit, and the right habits turn into disciplines over time
- Cash should flow like a heartbeat, in a steady rhythm, not in random panicked pumps
- Processing finances twice monthly reveals the true accumulation and flow patterns of money
- The cue-routine-reward loop transforms reactive panic into proactive management
- Set Calendar Reminders for Every 10th and 25thBlock time on your calendar for every 10th and 25th of the month for the entire year. These are non-negotiable appointments with your money. Set them for a consistent time, like 9am, so they become automatic.Pro tipTreat these appointments with the same importance as a meeting with your biggest client. Your money deserves at least 30 minutes of your focused attention twice a month.
- Deposit All Revenue Into the Income AccountEvery client payment goes into the Income account only. Do not pay any bills directly from deposits. Let all income accumulate between allocation dates. This creates the serving tray that will be distributed to the small plates.WarningResist the urge to allocate money as it comes in. Batching creates the rhythm. If you allocate every deposit, you lose the accumulation pattern that reveals your business's cash flow trends.
- Allocate on the 10thTransfer all accumulated income from the Income account to each small plate account based on your current PTRs. Move Profit and Tax allocations to your no-temptation bank. Pay yourself from Owner's Comp. Pay bills due from the OPEX account only.
- Allocate on the 25thRepeat the same process. Transfer accumulated income, allocate by PTRs, move Profit and Tax to no-temptation accounts, pay yourself, and pay bills from OPEX. After a few cycles, you will feel the rhythm and develop an intuitive sense of your cash position.Pro tipAfter 2-3 months of this rhythm, you will be able to log into your bank, spend two seconds looking at balances, and know exactly where your business stands financially.
Van Dyke's morning routine of waking at 4:30am started from stress and poor sleep, but evolved into a disciplined rhythm that structured his entire day. He realized the key to the morning routine was actually going to bed by 10pm the night before. Similarly, the key to cash management rhythm is the regular allocation schedule.
Mike Michalowicz designed the 10/25 rhythm in the original Profit First system based on behavioral science principles around habit formation. Shawn Van Dyke adopted it for contractors, noting that construction business owners are particularly prone to reactive bank balance checking because of the irregular timing of progress payments, deposits, and material purchases. The rhythm provides the structure that construction chaos naturally lacks.