Payday...For those with employees.

Discussion in 'Business Operations' started by TXLAWNBOY, Apr 10, 2006.

  1. TXLAWNBOY

    TXLAWNBOY LawnSite Member
    Posts: 220

    I am just curious to see what day of the week those of you with employees give out checks. And what are the reasons you pick this day of the week.
     
  2. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    Teusday at the end of the day. Picked it because its the middle of the week. If they drink alot they will be broke by the weekend and possibly wont be able to drink, and there is still 3 days till the weekend. Only down side, once an employee was phoning a creditor making payment arrangments and they didnt beleive that he got paid on teus, but that was kind of funny.
     
  3. wacamaster

    wacamaster LawnSite Member
    from MI
    Posts: 198

    You'd rather have them drink during the week and being hungover when they work for you?
     
  4. TXLAWNBOY

    TXLAWNBOY LawnSite Member
    Posts: 220

    Tuesday is the day I pay also, partly for the same reason you stated Lawnman Scott. Also I used to pay on Fridays and it seemed like I had people call out on Mondays more. Paying on Tues. I seem to have less problems with call outs on Mon. and Wednesday is not a problem either. This also gives me the weekend to get hours together and have more time to look over the books and make out checks.

    So far I haven't had problems with people showing up to work hungover, my employee handbook states loud and clear the polices about showing up to work hungover or smelling like alcohol.
     
  5. exmark1

    exmark1 LawnSite Member
    Posts: 32

    I normally pay Monday at the end of the day. This way there is an incentive to not screw off and call it Monday because they know there is a pay check waiting for them at the end of the day.
     
  6. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    You guys pay every friggin' week?? Wow. I never had a job that paid me every week. Well, maybe I'm getting old.

    Anyway, we've always paid twice a month, once on the 5th and again on the 20th.
     
  7. TXLAWNBOY

    TXLAWNBOY LawnSite Member
    Posts: 220

    Hey Jim, I have thought about paying everyother week and will look into more, other than having to do payroll every week what are some of the advantages you like about paying every 2 weeks?
     
  8. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    First, understand I don't pay every other week. I only pay twice per month.There's a difference.

    I think it would be a headache to do payroll every week. Just an annoyance to start with. And the more employees you have the more of a headache it becomes....gathering everyone's time cards, tracking down employees in the middle of the day to ask them, "Hey, what happened on the 12th? You didn't clock out that day.", double-checking time cards, calling and holding for the payroll company, etc. It's all just a headache. Maybe not so much for you guys who have only one or two employees. But when you got 15, it becomes a little more of a headache. And one I'd rather only go through only twice each month rather than 4 or 5 times in a month.

    There are financial benefits to doing it twice a month too. My friend hired his second employee not to long ago and I referred him to our payroll company. He called me back and said, "Wow! That was more expensive than I thought it was going to be." I said, "Really? That's funny. I pay less than what you got quoted and I have a lot more employees." Turns out he pays weekly. BIG difference in payroll costs if you have a company doing payroll for you.

    Then there's the cash-flow situation. Most business owners know cash flow is sometimes tight. Sometimes it's hard to get all the money in before payday. Most employers have had those days where they just BARELY got paid from the customers and got the checks in the bank RIGHT before payday. Paying less often helps you hedge this problem. Gives you more time to get paid on jobs, gives you more time to project, plan, etc. There have been lots of times when I didn't have much in the bank one week and then the next week everyone paid me and I went up to $20K. But that would have sucked to have a payday right on that low week. Paying employees only every 2 weeks gives you more flexibility and less pressure to ALWAYS have money in the bank.

    The other part of the cash-flow situation is when customers pay ME. A lot of our maintenance customers pay us right near the end of the month. The second most common time maintenance pay us is on the 15th. So by receiving a lot of payments on the 15th, I am always more ready for a 20th payroll run. And then when we receive most of the other payments on the 30th, that helps me prepare for the payroll run on the 5th.

    I really don't see a reason to pay every week. I've never had anyone complain about it or even bring it up. It seems to be pretty normal. Employees seem not to have any problem with it. So if it costs less, creates less headaches for me, and makes cash-flow run more smoothly, I don't see any reason why I'd do it any differently.
     
  9. TXLAWNBOY

    TXLAWNBOY LawnSite Member
    Posts: 220

    Jim, thanks for your input, you answered pretty much every question I had about paying twice a month or every two weeks. I only have 3 employees right now but am slowly building my biz. and know I will change to doing a every 2 week payroll in the next year.
     
  10. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Posts: 1,387

    I think that if you pay every week it would be easier to keep guys b.c most jobs pay every 2 weeks. Plus it helps their cash flow.
     

Share This Page