A couple of weeks ago, I wrote an article called Bonus Bagging: Matched Betting Review, in the article I told you about a no-lose system I had been trying out called Bonus Bagging. I wrote about how you can use the system to guarantee profits by opening up online bookmaker accounts, then using the accounts to make qualifying bets and then using the free bets you're given, to make money by laying them off on Betfair.
The system works, no doubt about it, the software which tracks the bets and sends them to your email is flawless and works perfectly even if the odds of the event you have been sent have changed by the time you go to put the bet on.
In the article I suggested that you should open a separate bank account and that you should keep an eye on your cash flow, for the simple reason, that as you progress in the system, the accounts can start to get complicated.
I have been doing the system myself, as I wanted to test it before telling you about it and I have come to realise that the scant accounting advice I gave you, was not enough, so I've written this article in order to go into more detail.
OK, so quickly for those who can't be bothered to go back and read the; Bonus Bagging: Matched Betting Review, let me quickly recap what the system is and how it works.
Bonus Bagging is a system that is driven by arbitrage software, the software will find an event with odds that will allow you to profit by backing a bet with an online bookmaker, whilst laying the same bet; thereby covering all possible outcomes, with Betfair.
The reason why accounting is so important when you're playing a matched betting system like Bonus Bagging, becomes apparent pretty soon after you start playing the system, especially if you don't separate your Bonus Bagging accounts, from your everyday accounts.
If you already have a Betfair account and that account is linked to your everyday bank account, then the temptation is, to just carry on in the same vein and use the same card you used for your Betfair account for all the new bookmaker accounts you are going to open.
Unless you are a very wealthy individual with money coming into your account everyday, then this is a bad idea....
The reason that using your regular account to play Bonus Bagging is a bad idea will become clear when you start winning bets with the new accounts that you are creating. That's because you can only play with money that's either in your bank, or your Betfair account. So you need to transfer and that takes time, how much depends on the bookmaker, one might take a day, the other five.
This isn't a problem if you are using a separate account as it's pretty easy to see whether you are able to make a deposit or not. If however you have mixed the Bonus Bagging accounts into your everyday finances, with money going in and out for your various needs, then you could find yourself in a bit of a tight situation. Waiting for money to clear just as money is going out for bills, food, etc, is a hassle you can do without.
So Let's take a look at the steps we need to keep good accounts, so we can keep the system running as smoothly as possible, without unduly impacting on our everyday finances.
Step 1 – Open a separate bank account: You may want to do it with your existing bank, or you may want to use an entirely new bank, that bit's up to you, the only advice I would give on the type of bank you use, is if you are in the UK and you're already a Halifax or Lloyds customer, they are essentially the same bank and therefore transfers between Halifax and Lloyds accounts happen instantly, which is an obvious advantage when moving money between wallets.
Note: Most online bookmakers will not give you the free bets which you need to make this system work if you use PayPal, so don't use PayPal for this system.
Step 2 – Open a Betfair account using the same bank account as above, if you have already got a Betfair account and you have already aligned it to your main bank account then it is not absolutely necessary, but it will save a lot of hassle down the line, so I strongly advise it.
Note: Betfair typically take 4 working days to transfer money from their account to yours, however this may be different for you and your bank; so it's worth making sure you know exactly how long it takes for you.
Step 3 – Create a Bonus Bagging bookmarks tab on your internet browser, then anytime you open up a new bookmaker account, you can see at a glance, without having to open your accounts, how many new bookmaker accounts you have.
Note: I cannot over stress the importance of this one, if you lose track of your accounts then not only will that affect your profits, but it will also mean that you may miss extra free bets that the bookmakers give from time to time.
Step 4 – Create a new email address, my preference, even though Google annoy me from time to time, is gmail as I already have a few gmail accounts and it's nice to have everything the same.
Note: I recommend using the first 3 letters of your first or last name and then the code FB for free bets and then 3 numbers so for instance CAMFB999@gmail.com – then, and I can't stress this enough, use the same name for EVERY single new bookmaker account that you open, use different passwords, but the same user name (trust me, you'll thank me down the line).
Step 5 – Create a free bet Profit & Loss sheet, this is a simplified version of the balance sheet that you'll use to track your money. This sheet will tell you at a glance how much money you have made at any one time.
Note: Whilst this sheet can tell you about profits, it can't keep a track of cashflow, so whilst it might be tempting to just use this on its own, I strongly advise you don't.
Step 6– Create a balance sheet.
So let's talk now about how to create a Bonus Bagging balance sheet; first you have to imagine your float, kitty or bank, whatever you like to call it is sitting in three different places at any one time, for ease of understanding, we will call these places; wallets.
So there is the Real Wallet, your chosen bank account, the Betfair wallet and finally, the Virtual wallet.
In the example below, you can see I have labeled the columns A-K, where A-C represent my bank, D-G represent Betfair and H-K represent whichever bookmaker I am using at the time and how much money is waiting to come into my Real Wallet.
Let's break it down, section by section and first take a look at columns, A, B and C the Real Wallet, basically the bank account that you use to transfer funds.
So the first thing you'll notice is all the figures are at different levels, this represents what order the transactions took place in on that day. Clearly there are just a couple of transactions here, but you may have several in a day. So column B has £200.00 at the top, the (pic) stands for paid in capital.
This is how to represent the money you start with, if however you ever need to put money into the account from another source, like your main bank account. Then I would recommend using a code like Ln for loan, the reason you might want to do this, is that you're waiting for funds to clear and you want to keep playing the system. It is
important that you keep a track of money coming in from your personal finances so you can be clear about how much profit you are making. Apart from that, Bonus Bagging is self sustaining and should only ever need cash to plug a cash flow gap, so if you loan in, you should pay back as soon as your bet profits are back in play.
Column C represents all money leaving my account, with a code for where it's going, so you can see at a glance I have £75 going out to Betfair and then £10 to Paddy Power. Then the lowest figure is in column A, my closing balance for the day. I have left opening balance out, as it's unnecessary clutter for our purposes.
Now onto the Betfair Wallet.
On the left we have Betfair IN, remember we use this column for money paid into Betfair AND winning bets.
The reason we do this, is to save us space and clutter. Two columns crediting our Betfair account, might start getting complicated and we are focusing on what matters.
You will notice I put a code by the £75, the bc stands for 'bank credit' and it is the only time I use a reference code in the Betfair IN column, if I want to keep a track of what the actual bets are, I can do that separately. But because Bonus Bagging is a 100% guaranteed profit system, I'm not that bothered about the details of the actual bets, this sheet is for tracking cash flow and profit, not analysing trades.
Column E, Betfair OUT also has a dual purpose, this column will track withdrawals AND losses, again, the only time I will use reference codes in the Betfair OUT column, is when I am withdrawing to my bank, I personally use 'bd' standing for bank debit, but you may want to use a reference more familiar to you. As with the IN column, I don't care about which bets have lost, because I know for every losing bet on Betfair, there is a winning one happening in my Virtual Wallet. So in the case above, the fact that there is no reference code next to the £9.50 entry, indicates a losing bet.
In column F, Betfair Balance, I have put my opening Betfair balance and my closing balance together, I don't do this in the Real Wallet because the Bank IN, doubles up as my opening balance.
The next column is very important, column G, your Betfair Liability; arguably, the liability you carry on Betfair when waiting for a bet to settle, could be in the Virtual Wallet as it's money that's unavailable, but again, for the sake of clarity, it is in the Betfair Wallet.
It is important to know exactly how much liability you have at any one time, simply because when you're playing the system to the max, bets are coming in thick and fast. You want to know that you have enough in your Betfair account and bank account to cover new bets and new accounts.
Also what column G tells you, is how long you potentially have to wait before that money becomes real again. For example, you could be in a situation where you're waiting for 3 or 4 games, that are days away.
You know that any liability in column G may not reappear in your Betfair balance, because by adding the amount of time for the event to take place, to the amount of time it takes to transfer from your new bookmaker account, will give you the maximum amount of time you might have to wait to see that money again.
Finally, let's look at the Virtual Wallet, this wallet represents all the new bookmakers you will open accounts with, in order to play the Bonus Bagging system. You need this wallet, to keep a track of how much you're spending to open the accounts and how much you have in 'limbo' waiting to hit your Real Wallet.
In the example on the right, it is pretty simple to see that I first deposited £10 (which corresponds with column C, Bank OUT, in my real Wallet). I then placed a £10 bet, which is represented in column J as New Bookies Liability, where I only represent real money and not free bet tokens. I then clearly won the bet at evens (2) and withdrew £20.
The Accounts Payable column is probably the point whereby if you are a real accountant, or have had any kind of proper accounting training, you'll slaughter me for bad accounting practices! Because really, I should have an Accounts Settled column as well, but again, to make this as simple as possible to understand and use, I have left it out and have used colour coding instead.
For my purposes and for the purposes of quickly keeping track of what's what, when the money clears in my bank. I find it very easy to go back and highlight the accounts payable figure in green, and then copy and paste that into my Bank IN, in my Real Wallet.
The reason being, is that this sheet covers 2 week period, so at the end of the two weeks, and in fact at any given time, I want to be able to see how much money is in accounts payable and how much money has been transferred to my bank. It's very easy to count up all the non-highlighted figures, that way I know how much I have to play with and when I'll have it.
However, you may feel that an Accounts Settled column is in fact easier as you just tot up the numbers in each column to get a figure for both, but like I said, I felt it might be easier to explain and less daunting to someone who like me, does not like accounting and spreadsheets.
So that's it, if you start with a chart like I've shown you, and fill in the figures EVERY time you make a transaction, be it a bank transfer to a new bookmaker, or a deposit into Betfair or a withdrawal from your Virtual Wallet, you will be on top of it and you're ready to rake in the Bonus Bagging profits and monitor how well you're doing.
If you're an accounting whizz and you think you spot a flaw in my accounting system, or have a better solution, then hit me up in the comment section and tell me where I've gone wrong, or how to do it better!
Until next time, good luck and happy trading.
The Zen Trader