How To Disburse Salary?

• Disburse salary on a fixed date, as per the convenience of the company. Fixing a salary date is very important.
• We must ensure that we are not delaying the salary payment, unless there is an impossible situation which prevents us doing so.
• Take the interest of the employees in mind when deciding this date. If the date of salary is fixed, the employees can plan their payments. This is really helpful to them, as they can make commitments with surety.
• On its part, the company also can plan its own cash flow based on this fixed date.
• Once decided, stick to this date as far as possible and ensure that the salary is given by this date. Make exceptions only if it is impossible to manage the scheduled date. If the salary payment is delayed beyond the regular date, we must inform the employees in advance. Remember, delaying the salary payment does not save any significant money for the company, but it creates a very unreliable image of the company in addition to causing inconvenience to the employees.
• Also, being able to disburse salary on a specific date demands proper coordination and cooperation between various departments like HR, Accounts and Admin etc.
• It also instills a culture of discipline among the teams responsible for salary calculation and payment.
• Give a note clarifying the salary calculation and deductions (if any) along with the salary to enable the employee to understand how his salary figure is arrived.
• If there is any loan given to the employee, organize the agreed deduction of repayment installment from the salary after getting the confirmation from the employee. Ensure proper updating of the balance loan receivable from the employees.
• Many companies have a practice of allowing a payment of advance against salary after 15-20 days of the month. Such an advance must always be less than the salary earned by the person till that day and such an advance must be adjusted against the salary payment of the same month. Proper vouchers and records of such advance payments must be prepared and maintained.
• Nowadays, banks offer special salary accounts to employees of a company, which do not require maintenance of any minimum balance. The company can directly deposit money to such salary accounts. This is a very efficient alternative of salary disbursement. In this case also, the company must keep the salary date same every month.

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