Sense with Cents

One bit of advice I learned early on: there is no such thing as a payroll crisis. There is nothing which cannot be handled tomorrow, with one exception. We can also touch on disaster preparedness.

The exception is pay day. There is literally no allowance made for paying late. For me, I set my pay cycle in a way I end up paying 2 or 3 days before my published pay date (more on setting up your pay period and pay frequency). (California has specific rules, and the pay cycle information has to be posted/given out, and kept current.) This gives me my first "cushion" against disaster. I happen to pay via ACH or direct deposit, but I still keep paper checks on hand, and a working pen. This is my second "cushion" — I can hand write pay checks. My last "cushion" is knowing roughly how much each employee usually earns, so sans computer, sans internet, sans any other information, I know I can create a close enough check — or give out cash.

I have been through floods and bug outs from fire and quakes. I was still able to get money to employees each time. (I have much more detailed systems in place, but that is for another topic.) Common sense prevails. Be prepared, even if with cash, to get money to your employees. Even a daily amount in the short term may be suitable.

Now that you are ready to get through daily issues, think long term. Paper records, specifically either or both a payroll ledger and payroll check listing, stored in a separate location. Not next door, but likely mailed to a secure place outside of your known disaster area. That would be the basic. Paper survives internet issues, computer issues, and plain old human error (that loose nut behind the keyboard!).

Step it up to having multiple sets of backup data stored in what is commonly referred to as 3-2-1 style (search or AI search "3-2-1 backup"). Or, once you have lived through data loss, go full "I want to sleep at night" and practice disaster recovery at least once a year, such as taking a spare computer and getting all important things on the spare computer without touching your main computer or using your main internet connection. (At some point, if there are enough requests, I will share my personal setup(s).)

That covers the one true emergency. Everything else?

Forget to make a deposit? Make it as soon as you can. The tax agency will handle penalty and interest, and send you a bill. No need to lose sleep over it, but do set up a calendar with reminders about a week before each of your deposit days. Forget to file a report on time? No worries, file it as soon as you can. Yes, you will also likely get a bill for a penalty, but it is not a reason to panic. If it is your first late report, ask for a penalty waiver if you get a penalty notice. Again, set up calendar reminders. And if an employee complains about their withholding, that is not a crisis either — see Employee W-4 and Employer Duties.

About calendar reminders. My personal phone has 4 calendars I monitor. Personal is for just me, such as reminders of when my bills are paid or need to be paid. Work is for all business reminders. Family is the calendar shared among family members so we know when we are all "booked". And holidays. I color code each calendar, work happens to be red.

In my work calendar, I include things like tax deposits, tax reporting, pay dates, backup reminders (not to make them, they are all automated, but reminders to check them by doing a test restore), and so on. If you never test your backup, you cannot be certain your backup will work, or even has the desired information. The reality is unless you test your backup, it is only slightly better than no backup at all. I prefer the calendar reminders to come as emails, so they are harder to miss than a pop up phone message.

Practice common sense. Ask yourself, if my physical office and computer is not available tomorrow, can I recover? Until you can say yes, you have more planning to do. When you can say yes, test your plan, and revise as needed.

Once your plan is relatively solid, add to it in a way someone else can step in when needed. No one is irreplaceable — neither you nor I will be an exception to this rule. Protecting turf is bad for both employer and employee. Making it possible for someone else to handle your responsibilities does two things: it makes it easy for you to actually be away from work, and it makes it easier for you to get promoted. Often that is how it works — a new position is available, but you have to train your replacement first. Be more promotable: train those below you, and learn from those above you. Try to learn the job you want. Wise employers will see you as more valuable, and it makes your boss look good too. The person who hoards responsibility is the one who raises eyebrows.