Company didn't make payroll today...

[Denvergirlie]

Well I just got off a conference call... the company I work for didn't make payroll today... grr.

We have over a million dollars in accounts receiveable but our clients are not paying us, thus no money direct depositted today. Executive team in scrambling to take out personal loans to cover payroll and working with the bank to get them to cover payroll in the future based off of our accounts receivables, but hasn't solved the issue yet.

I am SO thankful that I don't have anymore debt! A year ago this would have been scary, but now it's just attention grabbing.

Luckily, I pay all my bills with the first paycheck of the month and this pay check would normally go to my growing FFEF (It's at 60% now), but this time I was going to get some repairs done on my truck. I can certainly put that off of a few days until payroll is made, but it's certainly caught my attention.

I think I am going to open a savings account at my local bank and transfer over some funds from ING. That way if it ever occurs again, I have at least a months worth of money to cover my bills readily accessible instead of a 3-4 day wait transferring from ING.

We have these cash flow issues every year at this time (our business is seasonal to a point), normally it's just vendors that get put off for a few weeks and never yet employees, so it's not blow me out of the water "shocking" but is distrubing none the less.

It's not time to look for a new job, honestly I would rather take unemployment for a few months than try and scramble and panic now. I am also the only person in my department, so my loss with the company would be very harsh. Could they do without me... sure but it wouldn't be good for long term. It would be a cutting your nose off to spite your face situation. We still have lots of new business coming in, good prospects for the coming year, just our clients have been holding onto their cash and not paying us for the work we've done for them. Likewise, our clients are multi million/ billion dollar companies, no mom and pop type places, so I don't fear them going out of business either.


This has remotivated me to start working on my eBay sales again. We have a room full of "inventory" to sell on eBay, but have been lazy. Well not no more! I want that money in the bank and not sitting on shelves in the spare, spare bedroom.

We don't really have any place to pare back, we did that long ago when climbing out of debt. No advice is really needed, but just thought to share my story. If it helps to motivate someone else to streamline their finances, all the better!

[StaceyS]

Wow - what an eye opener! Good for you for being on top of your own situation.

[fixer]

You provide a great example of why it is important to save for a rainy day. It's raining and you have an umbrella.

[homesteadmamma]

I hope it all works out for you. Hopefully some of the clients will begin to pay their accounts.

[TigerGirl1226]

I had that happen to me a couple time when times were tough for me...it was a horrible feeling.

[thefrug]

are you sure you just want to transfer just one month's pay? maybe you oughtta look at two? I'm just saying. sounds like you have it in hand. good luck!

[Denvergirlie]

are you sure you just want to transfer just one month's pay? maybe you oughtta look at two? I'm just saying. sounds like you have it in hand. good luck!

One month in a local savings account should be fine. I can always transfer more from ING at a later time. Knock on wood, it will never be needed, but should it be, it will be enough to pay the bills on the first of the month and then have another full month to make another transfer if needed.

They will eventually make this payroll it just isn't going to be today like normal. I have a enough money in ING to cover a little over 3 months of expenses.

Now if they don't make up this payroll and miss next payroll, then that's an issue, but honestly I don't see that happening. If it did happen, I could asked to be offically laid off and could file unemployment. What I would bring in unemployment would cover all of our expenses as well, granted not a lot left over, but it would cover all the bills. We've got our living expenses way down, over half of my income was used to pay off our debt and is now going into the FFEF (became debt free in Sept 08).

[my4littlebuffaloes]

Yikes! this happened to my BIL a couple of years ago, no warning at all, just didn't get paid one day. they were totally unprepared and were in a real bind. Good for you being prepared. It sucks, but you have a plan and are handling it well. Way to go.

Jennifer
my blog

[forHISglory]

Great story..... not for you, of course, but for all others who could possibly be in that bind. You have given good strategy. Here's hoping it comes through soon.

[Gardengal18]

With the news of more states being tapped out in their Unemployment Funds I wouldn't exactly bank on getting it. Ohio the other day was the latest to fail.

http://www.nytimes.com/2008/12/15/us...pagewanted=all

http://www.wdtn.com/dpp/news/WDTN_Oh...und_tapped_out

[Denvergirlie]

With the news of more states being tapped out in their Unemployment Funds I wouldn't exactly bank on getting it. Ohio the other day was the latest to fail.

http://www.nytimes.com/2008/12/15/us...pagewanted=all

http://www.wdtn.com/dpp/news/WDTN_Oh...und_tapped_out

Certainly something to keep in mind for sure. But luckily Colorado seems to be in a little better of a poistion than some other states. (Knock on wood of course)

http://cbs4denver.com/business/unemp....2.888725.html

But the Colorado Department of Labor and Employment says that's not true. Mike Cullen, who oversees the state's unemployment program, says payouts are increasing but no shortfall is expected in the next three years.

Cullen also says taxes paid by employers should keep the fund solvent even if reserves drop.

Payouts from the fund are expected to reach $360 million this year, up from $240 million last year. The fund had $670 million at the end of October.

[Ilovesewing]

What a truly horrible way to do business! I can't imagine being a business owner and not having money to pay my staff. Someone needs to come in and re-do THEIR budget!

I'm glad you're in a good place, but sure feel badly for those that count on that paycheck on payday

[dcompton]

I almost think the most astonishing thing about the story was that the execs were trying to take out personal loans to cover the payroll crunch. I have to honor that in this climate where everyone waits for someone else to fix things.

I worked for a non-profit opera company that had some really tight periods, and I have waited for paychecks too, but always with my consent. I'm sure enough could have been scrambled for that. The director waited for hers sometimes too. But that's quite different in a small place with only two or three employees.

I hope it works out soon for your company. At least it sounds like they are trying very hard to deal with the problem immediately and prevent it happening again.

[my4littlebuffaloes]

Ilovesewing - my parents have their own business and it is a lot harder than you think to do a budget. there is a constant flow of cash, from getting paid to paying other people it varies greatly from day to day. If the people you did business for don't pay you for whatever reason (and sometimes many of them hold off at the same time) then within a very short time you are out of money. that is the way it goes for small businesses, which it sounds like this is a fairly small company. Many times my parents have been waiting on hundreds of thousands of dollars worth of checks so that they can pay their suppliers and employees. they have always made payroll, but it has been very stressful for them over the years. Nothing like being owed that much money and not getting it.

[rowdy35]

gosh, I am so sorry Denver. That is a real bummer. I hope they resolve the payroll issue right away.