Having the Money There
The step that is not in the payroll software, is prompted by nothing, and is missing from most written sequences.
A bureauif the person who does this is away
The funding dates that sit behind one pay date
If missed: No time to move money if the balance is short
If missed: The payment fails and every employee notices within the hour
If missed: It processes the next banking day, which may be after the pay date
If missed: People chase, trust goes, and standing orders bounce
If missed: A penalty, and interest, neither scaled to employer size
Five dates, and the first two are entirely yours and the ones most often absent from any written sequence. One small employer's own schedule; the statutory dates differ by jurisdiction.
Funding is the step that sits outside the payroll software, is prompted by nothing, and is missing from most written payroll sequences. The run is correct, the filing is submitted, the payslips are issued, and the money is not in the account.
The practical lesson in “Having the Money There” is that payroll depends on a sequence somebody can explain. When a small team reviews online employee timesheets for online employee timesheets, the useful role is to organise time and project evidence before approval, with proportional settings and a clear correction route for employees.
It is the most visible failure available in this whole subject.
As a separate reference point for “Having the Money There”, see IMF labour-market resources. Current legal, tax and employment requirements should still be confirmed for the organisation’s location.
Why it gets missed
Because every other step is inside a system that asks for it. Funding is a separate action in a separate place, usually done by the same person, usually from memory.
- The pay date is not when the money has to be there.
- The banking day is not the whole answer either: banks have a cut-off hour, and an instruction given after it processes the next day.
- The second payment — what was deducted and is remitted later — comes out of the same account and has its own date.
When the money actually has to be there
Earlier than the pay date, by however long the payment method takes. A same-day method needs it that morning; a slower method needs it two or three banking days earlier.
Knowing which yours is, in days, is the start of getting this right.
The bank's own cut-off
Not the day — the hour. Payment instructions given after a bank's daily cut-off are processed the next banking day, and a payment instructed at five o'clock on the day before pay can land a day late with nothing visibly wrong.
Knowing the figure early
The total leaving the account is known as soon as the run is calculated, which is several days before it is needed.
A business that looks at that figure at the point of keying has time to act if the balance will not cover it. One that looks on the day does not.
When the money will not be there
The single hardest situation in small-business payroll, and the subject of its own difficult decisions. What can be done, in what order, and with what obligations is not a payroll question; it is a cash and legal one, and it is worth asking somebody qualified before the day rather than on it.
What payroll can contribute is early warning, which requires looking at the figure early.
Paying some and not others
Occasionally proposed and rarely defensible. Deciding who is paid on time converts a cash problem into a question about fairness that the business will be answering for a long time.
The second payment
What is deducted and remitted on somebody else's behalf has its own date, usually later, and comes out of the same account.
Businesses that fund for net pay and forget the second payment meet a penalty for a shortfall they were never short of.
Money that is not yours
A useful way to hold it: the amounts deducted on behalf of others are not working capital, even though they sit in the same account and spend identically.
This has its own note here, because the temptation is real and the consequences are not proportionate to the amount.
Putting funding in the written sequence
As a numbered step with a date and an amount, between approval and the filing.
It is the most commonly absent step in a written run and the one whose absence is most immediately visible.
Standing instructions
Useful and not a substitute. A standing payment of a fixed amount covers a payroll that never changes; an automated transfer from another account covers a predictable one.
Neither removes the need to check the balance against this period's actual figure.
Who else can do it
The one step most likely to be shareable: moving money between accounts usually requires bank access rather than payroll knowledge.
A second person with that access and a figure to transfer can fund a run they could not have produced.
The confirmation worth making
That the payment actually went, on the day. Not that it was instructed — that it went.
Looking at the figure on the day you key
The total is known as soon as the run calculates, which is several days before the money is needed. Looking at it then, against the account, is the whole of the early warning available here.
A business that checks the balance on the day of payment has removed its own options; one that checks at keying still has several.
What goes in the written sequence
Two lines rather than one: the figure, and the date it must be in the account — which is not the pay date and depends on the payment method and the bank's cut-off hour.
It is the step most often absent from a written run and the one whose absence is most immediately visible to everybody who is paid.
What to do when it fails
Tell people immediately, say when it will be fixed, and fix it the same day if at all possible. A failed payment explained within the hour is an administrative problem; one discovered by employees and unexplained is something else.