The Three Types of "Money In"

1. Payouts

What it is: Profit share from funded account trading

Source: Funded Accounts module

Example: You trade a prop firm account, make profit, and receive your 80% share.

Key characteristic: This is earned revenue—money you generated through successful trading.

2. Refunds

What it is: Money returned to you

Source: Challenges or Funded Accounts module

Example: You pass a challenge and the prop firm refunds your evaluation fee.

Key characteristic: This is cost recovery—getting back money you previously spent.

3. Income

What it is: General business income not from prop trading

Source: Transactions module

Example: Coaching payments, affiliate commissions, course sales.

Key characteristic: Business revenue from activities other than trading prop firm accounts.

Why the Distinction Matters

For Accurate Business Understanding

If you see "Money In: $20,000" you want to know:

• How much came from actual trading profit (payouts)?

• How much was just getting your own money back (refunds)?

• How much came from other activities (income)?

Example:

• Payouts: $12,000 (trading revenue)

• Refunds: $6,000 (challenge fees returned)

• Income: $2,000 (coaching)

Your trading actually generated $12,000. The $6,000 in refunds recovered costs you spent on challenges. The $2,000 is separate business income.

For Tax Purposes

Different income types may have different tax treatments:

• Trading income: Might be business income or capital gains

• Refunds: Typically reduce your expenses rather than add income

• Other income: Standard business income

Consult a tax professional for proper classification.

For Evaluating Performance

True trading performance comes from payouts. If most of your "Money In" is refunds, you're recovering costs—not necessarily profitable.

How They're Categorized

Payouts

• Created in Funded Accounts module

• Status must be "Approved"

• Directly tied to a specific funded account

• Represents your profit share

Refunds

• Created in Challenges or Funded Accounts module

• Typically challenge fee refunds or account credits

• Returns money you previously paid

• Reduces your net costs

Income

• Created in Transactions module

• Type set to "Income"

• Not connected to prop firm accounts

• General business revenue

Where They Appear

Dashboard

All three appear in "Money In" but may be broken down:

• Total Money In: Combined

• Breakdown available (payouts, refunds, income)

Reports

• Income Report: Lists all three types

• Annual Summary: Shows subtotals by type

Module Views

• Payouts appear in Funded Accounts

• Refunds appear where they were created

• Income appears in Transactions

The Refund Distinction in Detail

Refunds are often misunderstood. Here's the key concept:

Refunds are not profit. They're cost recovery.

The refund in the third scenario doesn't add to your profit—it just zeroes out the cost. The $3,000 payout is your actual earnings.

Dashboard Health Calculation

When the Dashboard calculates business health:

Money In = Payouts + Refunds + Income Money Out = Challenge Costs + Expenses Net Result = Money In − Money Out

Refunds contribute to Money In, which helps offset challenge costs in Money Out. This is mathematically correct—getting a refund improves your net position.

Practical Example

Year Summary:

Interpretation:

• Trading generated $25,000 in revenue

• You recovered $3,000 of costs through refunds

• Other business activities added $5,000

• You spent $10,000 on challenges and $5,000 on expenses

• Your business netted $18,000 profit

The $3,000 refund means your net challenge spending was $7,000, not $10,000.

Best Practices

Track All Three Separately

Record each in its correct module so categorization is accurate.

Don't Confuse Refunds with Profit

When analyzing performance, focus on payouts for trading revenue.

Use Reports to Understand Mix

Review Income Reports to see the breakdown of where money came from.

Next: Challenge Costs vs. Expenses →