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This is (regrettably) common at poorly capitalized companies, as employees are the biggest expense and as making payroll on time every single time requires discipline.
You have to make payroll, on time, every time. That is the only expense for which this is true.
You have to make payroll, on time, every time. That is the only expense for which this is true.
This advice is partly informed by the way payroll and payroll taxes is special cased legally and can result in you personally being held liable for the company’s debts, but mostly informed by the special moral responsibility employers have to employees above all other accounts.
Every other counterparty is a sophisticated business which has already priced in your counterparty risk.
Employees treat payroll as a sacred trust. That may be suboptimal personal financial management but they’re outsourcing sophisticated risk management to a business i.e. you.
Employees treat payroll as a sacred trust. That may be suboptimal personal financial management but they’re outsourcing sophisticated risk management to a business i.e. you.
