Friday, January 29, 2016

The Right Pay Dates have a Huge Effect on Cash Flow

In the relationship between employer and employee, one day stands out among all others: Pay Day!

Ideally, we all love what we do and we'd do even if they didn't pay us. But in the real world, we all have cars and kids and rent to pay. So pay day matters.

In my latest SOP video, I address the topic of choosing pay dates. As there are two sides to the relationship, there are two major considerations:

1) When are good times for employees to receive money?

2) Which days are best for the employer's cash flow?

Cash flow is always a major consideration. If you get pay dates wrong, you might have to delay paying employees because you just don't have the money. Worse - you might delay paying the taxes on pay day. That's the road to a fight with the federal government you can't win.

So, which are the best days to pay? And how often should you pay? Weekly might be good for cash flow, but payroll processing costs money. Whether you do it in-house or pay a service, weekly is the most expensive because you're almost always running payroll!

Note: This video is packed with info. Watch it twice and post your questions.

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