For most business owners, payroll is the companies largest expense and making sure that you have enough funding in place to make payroll for EVERY pay period you face can be more than half the battle for a business owner. We found some good tips here that will help when you are facing a cash crunch and a payroll deadline at the same time.
If you do actually miss a payroll deadline it is imperative that you communicate quickly and openly with your employees. A missed paycheck can have serious consequences for the people that count on being compensated for their work; by not communicating the issue and having a plan in place to fix the problem, you only exacerbate and compound the issue.
Short term fixes can be found from the following places; personal funds, customer payments through AR that is not yet due, AP to suppliers, bank loans (though the process can be lengthy), pay cuts (cut your own salary first), reduced hours and friends and family. These avenues can help you address the immediate problem but a hard look and new planning for your business needs to take place for the long term.
Missing payroll is a nightmare scenario for any business and the problem can be an even bigger issue for your employees. Long term planning and securing working capital for a rainy day are the best way to ensure that you don’t find yourself in this predicament.
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