Retained earnings as a planning input

Retained earnings often show up after the fact as whatever is left. Treating them as a planning input flips that. You set a buffer first, then model owner pay and draws against it. That makes the tradeoff visible before cash leaves the business.

Put retained earnings on the sheet

A simple planning stack looks like this:

• Target retained earnings or cash buffer
• Owner pay as its own line
• Draws tested against what remains

Owner Compensation helps you see those lines together. It does not tell you the right buffer. It shows what your inputs imply.

If retained earnings are leftover only, draws will always feel available.

Compare buffers before changing pay

Two buffers create two different draw stories.

Run a tighter buffer and a larger buffer against the same owner pay assumptions. The gap is the planning conversation. Free, full, and itemized views keep the lines readable.

Pro can save those scenarios if you want to revisit them later.

Revisit when headcount or revenue shifts

Buffers that worked last year may not fit this year.

Useful revisits include:

• After a hire raises fixed costs
• Before raising owner pay
• When revenue is uneven
• When you want a larger cash cushion

These are educational comparisons from your inputs. They are not tax, legal, accounting, or financial advice.

Setting retained earnings first made every draw conversation shorter.

Keep the model live

Assumptions change. The estimate should change with them.

Update the buffer when the business changes. Support covers the software, not advisory work.

Open Owner Compensation when you are ready to run your own numbers.