You are currently viewing What are the consequences you can face by running payroll late?
Running payroll late

What are the consequences you can face by running payroll late?

In today’s fickle keeping a business afloat is not an easy task. The market is unpredictable and planning for the future has become utmost important. In this scenario small to medium businesses have to look for ways to cut expenses in order to maintain a healthy cash flow. In such scenarios many business owners might think of delaying payrolls as an effort to better manage the available funds even if it is for a short duration. Nevertheless this is both unethical as well as illegal and can have severe consequences on your business. Payroll is one area where one should never make any compromises.

Late payment to employees can have a variety of implications. One being that it is illegal under law to not pay or withhold your employee’s salaries. Another is that untimely payrolls can affect employee morale and trust.

When you come to think of it, it may not seem like such a big deal you may think, “Let me run payroll late or skip it this month” but this can have a detrimental effect on your business. Your employees are the nucleus of your business, when they are paid on time they will respect you, they will be happy, productive and work towards the growth of the company. But when they are paid late they become displeased and loose respect for you and the firm. Studies show that unhappy employees are way less productive in their work and this in turn has a harming effect on the company’s growth. Running late payroll will not only bring down the employee morale but also have serious consequences. You are also answerable to pay payroll taxes which will not be paid on time if you delay payroll. You can be penalized by the law for late tax payment. So even if it seems like a small and tempting thing to do delayed payrolls will bring on more problems than the short term solutions they provide. Best to run your payroll on time. Hence it is of utmost importance to foresee and predict your cash flow requirements so that you can process payroll on time. If a day comes where you have a short term low funds, 1 Click Capital can be of assistance to you can solve your payroll financing problems.

In order to avoid skipping payrolls it is integral that you manage a proper cash flow throughout the year. One should place an efficient cash flow management system in place which works for your business as well as vendors and employees. When it comes to managing cash flow the most important team rapport to build is with the accounting team. Plan with your accounts team and develop a system in the outgoing and incoming capitals. It is also important to have a budgeting plan ready for all your business expenses. Examine all your overhead costs along with getting rid of expenses that are unnecessary.  In a volatile market it is difficult to predict every expense as well as cash flow with the vendors that keep changing and their terms renegotiating.

A business can do everything systematically according to a plan and still face temporary cash glow issues, this is very normal to happen especially will small and medium businesses. In this case, payroll funding can be a massive help. It can protect you from delaying payrolls and all the damaging consequence that come as a part of it.

1 Click Capital is a payroll funding portal that helps businesses keep their business steady and stay afloat. We understand how unforeseeable cash flow needs can be and how sometime in spite of doing everything right you can still find yourself on the other end of the spectrum. If you need business loan in Mumbai or any other city in India, 1 Click Capital can be your support partner. We can provide you with a line of credit to clear any payroll expenses. Unlike traditional money lending partners which may take weeks to approve a loan, we work fast and swiftly as we understand that the need for a cash flow crisis needs immediate remedies. 1 Click Capital will approve your application within 48 hours and process your needs.

Partner with us and use our resources to steer clear of the detrimental consequence of not running a payroll. Let us help you help your employees stay happy and productive.


India’s first ever digital portal to offer payroll funding, making every business owner’s dream possible through everyday capital realities.

Leave a Reply