Trust between employers and employees is a vital aspect of business that requires your attention as a leader. It forms the foundation of a motivated team and a smooth working relationship with your people. Building this trust involves consistently following through on fundamental employer responsibilities, and one of the most important of these is the timely disbursement of salaries and benefits.
However, if you’re running a startup your business may be more vulnerable to cash flow challenges, unexpected expenses, or operational disruptions that can sometimes lead to salary delays. While these issues may seem understandable from a business standpoint, they can have consequences for employee morale, productivity, and retention.
In this article, we’ll explore actionable steps that business owners can take to ensure salaries are always paid on time, fostering trust, supporting employee morale, and contributing to long-term success in the process.
Use Tech Tools to Reduce Human Error and Improve Timeliness
Managing payroll for small business owners can sometimes mean taking a hands-on approach, especially since it’s typical in startups for one person to wear many hats. If you’re handling payroll yourself or if you have limited human resources, using advanced payroll management systems can significantly improve processes to help avoid setbacks. For instance, Maya Business Deposit from Maya features a disbursement tool that can be used as an effective payroll management system.
While old-school payroll management systems are prone to delays due to user errors, forgetfulness, or time constraints, a tech-forward payroll system ensures that employees are paid on time by allowing you to disburse funds with minimal effort. Additionally, it ensures compliance with legal and tax requirements and statutory obligations while also reducing the likelihood of mistakes that could lead to penalties.
Stay Proactive with Routine Financial Checks
Stay on top of potential issues that could disrupt your payroll schedule by conducting regular financial audits. These audits don’t have to be formal or expensive; monthly or quarterly reviews of your financial statements can alert you to cash flow gaps, unpaid invoices, or excess spending before they become payroll problems.
Furthermore, you might consider setting up internal controls or hiring a part-time accountant to help you assess payroll readiness regularly. Keeping track of your numbers lets you ensure there’s always enough runway to meet payroll deadlines.
Prepare for the Unexpected with Backup Plans
Unforeseen disruptions, like software crashes, banking delays, or a key employee’s absence, can derail your payroll process. Hence, it’s crucial to have backup systems in place so you’re not caught off guard.
Maintaining a payroll reserve fund that covers between 3 to 6 months of salaries, serving as a financial cushion during unexpected events. It also helps to document your payroll process so that it’s easier for another team member to step in if needed.
Avoid Penalties and Legal Risk through Compliance
Delayed salaries don’t just damage employee morale; they can also lead to legal issues. As an SME, your business must comply with the national and local labor laws of the Philippines regarding wage payment schedules, tax withholding, and benefits contributions.
Keeping up with relevant employment laws is critical since non-compliance can result in fines, lawsuits, and reputational consequences.
Accurate Records Support Smooth Payroll Operations
Timely and correct salary payments depend on accurate employee records. Inconsistent or outdated information about working hours, tax codes, bank details, or benefit deductions can delay processing or lead to salary discrepancies.
As such, make sure to invest in a centralized HR or payroll system that keeps real-time records of contracts, time off, pay rates, and employee classifications. Moreover, ensure that sensitive data is secure, regularly reviewed, and easy to access when needed.
Foster Open Communication to Build Trust
Even with the best systems in place, there may be rare occasions when a salary delay is unavoidable. As a business owner or team leader, your employees count on your honesty and reassurance at this time.
Before payday rolls around, make sure to keep employees informed about payroll schedules and any anticipated changes. Encourage questions and feedback, and be transparent about how you're addressing any delays. Keeping communication open is the best approach in this case since employees are far more understanding when they’re kept in the loop than when they’re left in the dark.
Indeed, for startups, ensuring timely salary payments is more than an operational task; it’s a commitment to your team’s well-being and a foundation of workplace trust. And when employees know they can count on you to pay them accurately and on time, they feel respected, valued, and secure.
By using reliable tools and sticking to best practices, you can keep your team engaged and motivated while building a reputation as a reliable, responsible employer.
Maintain Team Morale with Timely Payouts Using Maya Business Deposit
Sign up for Maya Business to ensure secure and timely salary disbursements. Setting up a Maya Business account lets you open a Maya Business Deposit account and use it to pay your employees with its disbursement feature. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on a PHP 1 million deposit. Furthermore, you’ll be able to transfer money to your team members for free via InstaPay and PESONet, letting you save more.
Signing up also qualifies you for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months, allowing you to have another funding source to further develop your business. Just use Maya as your primary processor for all wallet and card payments. The more you use our solutions, the better the loan offer will be.
Sign up for Maya Business today to enjoy the benefits of Maya Business solutions.
