Here are a few things I’ve changed over the year when it came to payroll and ultimately why we changed them: 

  • We use to pay every other Friday. We shifted to the 1st and 15th. We did this for a few reasons. The first was – as our payroll grew, our employer withholdings did too. Sometimes there were 2 payroll periods in a month and sometimes there were 3. That meant some months I owed more in taxes than others. I like consistency. It allows me to budget a little bit easier. There are always just two pay periods when you pay on the 1st and 15th, so that was a bit easier to budget. The second reason was – it would be Thursday at 8 p.m. and I was panic. Every single week. I’d have to go back and triple check the calendar to see if payroll was the next day or was last week. Finally – Fridays were a terrible day to pay our staff. No one worked on Fridays but me, and back when we were new, we were doing paper checks. That meant every time someone needed their paycheck, I had to run to the gym to meet them. It wasn’t fun, and it wasn’t fun for my family either.
  • We have tried EVERY clock in system available. Ok, maybe not every one, but we’ve tried a lot. I did the good ‘ole pen and paper route. We had a notebook and everyone had their own page. There were always errors, coaches with bad handwriting and a lot of manual entry for me. Eww. Then we moved to an online system. It worked well, but didn’t offer mobile clock in. Around that time, we were really growing in our mobile tumbling program, so that wasn’t working either. So, for several years we happily utilized our class management software (Jackrabbit) and that worked well too. Last year we switched to a free app called Homebase. I really liked it because it allowed for more features – one of which being that it connected to my Point of Sale System and could show me my labor percentages at any given time. So, whatever you use – make sure it’s not taking you longer than it’s worth. There are some great, free options that connect right to payroll companies. Don’t sit and manually decipher your coaches’ handwriting and calculate their time. It doesn’t have to be that hard.
  • We used to not allow tips. We do a LOT of birthday parties at the gym. It was always sad when someone wanted to tip my coaches and they couldn’t accept it. We didn’t have a way of tracking tips in our payroll (tips are taxable!) so our coaches had to turn them down. When we switched clock-in apps though, the new software allowed for tips. So now, if my coaches do an outstanding job on a birthday party, they can accept that tip as long as they report it. It’s their responsibility to report it (just like a server or bartender), but we’ve made it possible for them to do so.
  • We used to give cash bonuses and incentives. Yeah….that’s not legal in my state anymore so this one had to go away. Now, we celebrate the bonus and they get it on the next paycheck. The government takes their portion of the taxes out, and everyone is happy. It’s legal and it works. Is it less exciting than handing someone a $50 for a great job? Yes, but it’s important that you’re both legal AND taking every possible tax write off (including bonuses to staff.) 
  • We paid in paper checks until 2020. A few years before that, we tried direct deposit. Every time they pulled the lump sum though, I would be just a little irritated because it wasn’t the day they said it would be. Sometimes it caused me to rush to log in and transfer money. I was using Profit First, and there just wasn’t always a margin. You see – when you start Profit First – you will figure out any bad habits you have with spending very quickly. You’ll also learn that budgeting for annual expenses over the course of a year is EXTREMELY important, and if you’re using Profit First as it’s designed, you’re not going to rob Peter to pay Paul. So, I cut out direct deposit for a few years so I had better control of my money. I could ensure the money was in the proper account by the date I handed out checks. I wasn’t counting on someone else to pull it before they said they were. It wasn’t until we started seeing the benefits of Profit First and the increased cash flow that we finally shifted back to direct deposit. So, if you’re still doing paper checks, don’t rush into anything. Find the right company for direct deposit and hold them to it. Make sure you have it in writing what day they will pull the funds. Also, make sure if you’re using Profit First, you have a buffer in that account. Until you can do those things, paper checks work just fine. (I know it’s almost 2022….but cash flow is key!)