[Adam P]

a couple cleaners want to be paid fortnightly and i just wanted to check what the norm is for this as i've never done fortnightly before. i assume it's work 2 weeks, then 2 weeks later you get paid for the work so you're always 2 weeks ahead of yourself? then also i assume pay day is typically Friday?

many thanks

[Denise l]

Yes its fine if you want to do this. I used to run a fortnightly payroll for quite a few years. Positive: you dont have to tie yourself up every week doing it, Negative: you have to remember to do it every other week and it messes up your monthly accounts if you do a monthly P/L management figure because some months have 5 weeks.

[Robert Parry]

This question should have been resolved before taking on any member of staff, payment frequency should always form part of the contract of employment.

Weekly, or fortnightly payment cycles will increase your costs, even if you do the payroll yourself.

I would suggest, that a monthly payroll cycle is the norm within the industry. (Calender Month).

Regards,

Rob

[Office Cleaning Company]

Agree with above - monthly payroll is the norm and easier from admin point of view

[Gilbert Sprous]

I have had cleaner request a different pay frequency but I stick to the once per calendar month.  It is too much work to do it more than that.

Cheers

Gilbert

[newbroom]

Once Robert Parry is on the money, its your cashflow to control monrthly paid staff is better for this. Remember you run the business not the staff.

[gordonswindows]

All that said we do pay weekly and the difference in cost from monthly is so small as to not matter, ourpayroll is done by our accountants and the cost to us from them for weekly is as monthly

But and this is particularly relevant in today's economic climate weekly pay attracts a wider choice of employee, many households have two people working and if one gets paid monthly it makes it easier to get through the long month with the second wage being paid weekly

I like the comment about you running the business not the staff but by providing what is seen as more attractive working conditions you attract more and better staff so actually by giving the staff what they want you are running the business

Gordon
Ps cash-flow needs to be supported by the monies coming in from your clients not saved by what you don't pay to the staff

[Adam P]

good reply gordon. made me rethink this and i think it's better to offer this to the employee if i can do it without any extra cost. i imagine many more will want this as the plan is to take on more work and staff so best i get ready now with fortnightly payment and used to it when i can.

[cml]

I would agree there are pros and cons for bi weekly paid staff. 

Generally monthly is considered the norm but where companies cover small contracts of less than 10 hours per week it seems advantages to pay biweekly.  In my opinion weekly/bi-weekly payments increases the administrative burden and impact on costs and on the other hand  can increase quality and loyalty of staff.

The benefits need to be weighed against costs. i.e. client settles invoices monthly in arrears therefore are you liquid enough to sustain bi-weekly payment when you may not have received payments yourself from your client?
You have to consider your working capital (cash at bank)  to ensure you can cover all bills and payroll in lieu of payments due from clients.  Alternatively costs on activities charged by bank etc.

If this method works for your company and costs are minimal then you may want to consider bi-weekly payments.  Not in favour of weekly payments but bi-weekly is an option to be considered alongside hours worked per week by staff.  What ever method used it should be agreed before you employ staff and applied where staff only cover X hours per week making it your company standard.  All other staff working above your minimal weekly hours for biweekly payments could remain on montly pay.

I hope this helps


 

[Gilbert Sprous]

Ps cash-flow needs to be supported by the monies coming in from your clients not saved by what you don't pay to the staff

Gordon I am sure that you have a good grasp of cashflow otherwise you would have a hard time being successful in any business.  I have seen some good posts by you but you have explained this one a little wrong.  Cashflow is heavily involved with when cash comes in and when it goes out hence cash "flow".   You do not "save" and "don't pay staff" by paying once a month instead of weekly, you increase your cash flow during the month and pay all monies owed at the end of the month (or when ever you decide to pay, I pay on the 22nd and there was a business decision for that). 

If I paid weekly I would have to hire a bookkeepper or accountant to run my payroll, as Gordon currently does, but by doing it monthly I can do it myself.  This is all down to how much time I have, but I save that money and increase cash reserves and cash flow by doing it myself.

I understand that offering incentives can attract a higher quality employee but I think what also has to be considered is supply and demand.  Supply and demand includes human resources and currently the supply of workers is well above the demand.  When the imbalance swings this way it is usually because of stuggling economic times and it is during these times that cash flow becomes even more important.  I personally have not had any trouble attracting the higher quality cleaners recently just by advertising the vacancies.  If the economy turns around and I have trouble attracting the higher quality staff I will have to look at what I am offering but I am not sure that a weekly pay is not the way forward for several reasons.  I am not sure that the personality traits of someone that requires weekly pay, as a percentage of total applicants, is the type that would be a good fit for my organisation.  I also think that I can use the increased cash flow and cash reserves to offer incentives that are more lucrative, higher pay for example.

Saying all this, I agree that at times it could be a good idea to offer weekly pay but I think in most cases the cons outweigh the pros.

Gilbert

[gordonswindows]

Gilbert

What a well thought out and explained reply.

The subject of cash flow is always seen as cash in and cash out and your description of " flow" shows this however flow doesn't need to flow in and out.

A river can flow in one direction a tap can run or flow out but the real point i want to make is the amount of cash out doesn't matter.

Now, I heard that little laugh and of course the cash flowing out needs to be managed but the business that fails due to cash flow is not due to the amount of cash out but rather the cash in. Yes that can be seen as one and the same thing but if the amount you bring in is greater than the amount paid out you will continue to trade, whether profitable or not is another discussion.

An example is our latest contract is costing us £9k for new equipment and the first six weeks of wages, staff costs such as uniforms, admin and retraining etc now if we did not have sufficient cash flowing in we would not be able to accept this new client so six months ago when we first discussed the contract with the client we added new business sufficient to cover this additional "flow".

On the subject of doing the payroll yourself this can be seen as a cost saving but ask yourself how much you could be "flowing" into your business if you were not spending your precious time "flowing" the money out to pay wages. You obviously understand by being an employer the benefits of staff doing your work so consider another step forward with paying a book-keeper or accountant to handle your payroll. I am sure you can produce a greater amount than the cost of a book keeper with this extra time after all it is your business your idea your hard work which means you are the best person to create this additional work.

Gordon
Ps opinions! We have them and it is good to share

[newbroom]

 i have 30 staff payroll takes me 4 hours per month. its all about having the correct systems in place

[gordonswindows]

Absolutely systems are the way to go

But how much more can you earn by spending four hours a month on client service,marketing or networking?

It may be about control, it is your business so you may want to "be in control" which I fully understand but break free and get back to what made your business great!
Thats you out there "selling" your self your brand your systems your business

Gordon