This is the situation nobody writes about, and plenty of otherwise healthy businesses have been in it. A large payment did not arrive, or three arrived late together, and the salary date is on Friday.
Work out the real number first
Not the shortfall on the whole month. The shortfall on salaries specifically, on the actual date. Most owners in this situation are carrying a vague sense of panic rather than a figure, and the figure is usually smaller than the feeling.
Look for money that already exists
Before borrowing anything, check: overdue receivables where one phone call might work, an advance from a customer with work booked, a supplier payment due the same week that could move a fortnight, and any statutory payment where a short delay costs less than what you are considering.
Often the gap closes without any new money entering the business.
If it does not close, talk before the date
This is the part that decides everything. People handle a delay they were told about far better than one they discovered.
Speak to the team before payday, not after. Be specific: how much, when, and why. Vagueness reads as much worse than the truth usually is.
Pay the smallest salaries in full first
If you can only pay some, pay the people for whom the money is most urgent. Someone earning a modest wage has less cushion than a senior person, and usually understands the situation better if asked directly.
Then fix what caused it
Almost always one of three things. Receivables that were not chased, a customer concentration that made one late payment fatal, or no reserve at all.
The month itself is survivable. Being in it twice is a decision.
Leave a Comment