If you have an unexpected expense or there are sudden changes in your company cash flow, this can throw off the plans of your business. There are cases wherein it can affect its long-term goals. The worst-case scenario which has immediate ramifications is being unable to pay employees.
The inability in processing payroll in UAE will not only anger employees, it can also be in violation to local labor and employment regulations and result to your business incurring legal penalties. In addition, your staff can also file a wage claim against your business. So, if a pay period is coming sooner than you want it to and you are not sure if you will be able to make payroll, it is important that you know exactly where to get cash required. Here are tips on making payroll when you are unable to:
Use a business credit card
Get a business credit card that will let you get cash advance so you can use it in making payroll. This option is the most convenient if you don’t have a business loan or line of credit for your business; however, it is best that you only use a credit card as the last resort.
That is because a credit card cash advance often comes with a huge upfront fee plus there is a high change there will also be an interest rate. Also, credit card issues won’t be offering grace periods for cash advances unlike with regular purchases. This means interest will start accruing instantly.
Again, these costs will be less compared to potential legal penalties and fees which can come from you not making not performing payroll processing in UAE on time. Still, if there are cheaper options, then consider them first.
Secure a loan for your business
If you feel the current cash flow issues your business is experiencing are an outliner, plus you don’t think you will be requiring a business line of credit in the near future, then a business loan will be a good choice. While it can often take weeks or months in getting funding through small business loans, there are several lenders in the country that offer a more immediate funding.
Take note: it can sometimes be hard to get a loan if the business you are running in the country is new or it does not meet the specific revenue minimum required by lenders. You can also have a difficult time in getting capital when your business finances are not in good shape.
If you get approved and be able to secure a loan, even a high interest business loan can be worth it in order for you to avoid all the consequences from not paying employees in UAE on time.
Liquidate any surplus Inventory
Do you have surplus inventory? Consider selling it, most especially if you won’t be jeopardizing your business further if you liquidate to get an infusion of cash. There is a chance that you won’t get a lot of money from selling your surplus inventory as you would when selling it in traditional means as you need to sell goods or services quickly. But a lost profit is always better than mammoth legal penalties and fees. If you want to know which policies you are violating when not making payroll on time, we suggest you speak with a specialist on payroll processing in UAE.
Get a line of credit for your business
If you don’t have a company line of credit that can help with a cash flow issue, then now is the best time for you to consider one. A line of credit for a business will provide you with your much needed safety net. Keep in mind that you may be required in putting up inventory, property or equipment as collateral for a company line of credit. A lender is likely to check your company books of accounts, busines credit history, as well as your personal financial health to determine if you are eligible.
Seek help from family and friends
If you are in need of cash now and you don’t have enough time in going through an application process for a company line of credit or business loan, then consider asking your family members and trusted friends for a loan.
Understand that by doing this, you will be putting a strain on your relationship, most especially when you end up experiencing issues in paying them back. It is important that you treat the loan just like any other loan. It is best if you draw up a formal written agreement and agree on the terms and conditions, particularly the payments and the interest rate. Then, make it your absolutely priority to settle your dues on time. The earliest you will be able to do so, the better.
To know more about your options in making payroll accurately and on time, speak with a reputable firm on payroll outsourcing in UAE such as Farahat & Co.
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