If sales slip, costs rise and financing becomes harder to get, small businesses can fall short of cash and, sometimes, aren’t able to make payroll. Inc. contributor Lauren Cannon explored this difficult situation in a recent article.
“Instances such as this occur for a variety of reasons including low seasons in certain industries, absent receivables, and a down economy,” Cannon wrote. “However, one thing is clear-”employees and payroll taxes must be paid by any means necessary.”
Cannon spoke with a number of small business owners and experts to gather suggestions for companies facing a payroll crisis.
The first recommendation is to notify your employees as soon as possible that you won’t be able to pay them.
The second recommendation is to try to find methods of financing, particularly because not paying your employees and associate taxes could open you up to fines and penalties.
The third recommendation is to utilize available resources, such as liquidating your inventory.
The final recommendation is to restructure your business to ensure you won’t miss payroll again.
To read the complete Inc. article, click here.