Scrambling to Make Payroll?

Do you start to sweat when payroll time grows near? Do you find yourself scrambling to find the funds to pay your employees each payday?

I’m sure you don’t need me to tell you, this is no way to run your business. It’s stressful and unnecessary. It reflects poor planning and poor financial management. It doesn’t have to be this way, there is a better way, but it takes some time and discipline to get there.

You can eliminate a boat load of stress by resolving this problem once and for all. One way to do that is to create a separate payroll account at your bank.

Once you’ve set up your payroll account, determine what percentage of each of job you’re paid for would need to go into this account to meet your payrolls needs, whether they be weekly, biweekly, bimonthly or monthly.

Create a payroll budget and put money in your payroll account each time you’re paid for a job. Then when payday rolls around you can either write checks from the payroll account or move the appropriate amount of money over to your operating account and disperse from there.

I recommend you budget 20% more than your actual payroll amount. This extra 20% acts as an “emergency reserve”. Emergencies aren’t predictable so you’ll be glad you have it in the event of a true emergency.

The “payroll account” strategy may be hard to get used to at first. But once you get used to it, you’ll wonder how you ever did without it. And you’ll sleep a whole lot better!

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