Your employees are the most valuable asset of your company, and ensuring their well-being and the fulfillment of their basic needs is crucial, especially in this economic climate. Their psychological state can also significantly impact their ability to do their job. In the current cost-of-living crisis, any unforeseen family medical emergency, or unexpected expense can place your employees under financial stress, ultimately affecting their productivity. Salary advances are often sought by employees in such situations.
However, managing salary advances as a company can be a tricky task due to the following reasons.
Figuring out who is eligible
If your company handles salary advances internally, you must carefully manage who is eligible to receive these advances. What are the criteria for receiving the advances? Who is responsible for deciding? What is the process for receiving an advance?
Managing Cash-flow
If your company is providing salary advances directly to employees this can affect your company’s cash flow. You will need to properly budget for salary advances in order to ensure sufficient funds for your core business operations.
Unpredictable approval cycle for employees
Every salary advance will require a number of internal approvals. The employee submits a written request to either the company owner, financial manager or the HR, then waits for the approval, and this can sometimes take weeks or even months without a clear answer.
Long waiting time for employees to receive advances
Once the employee receives the salary advance approval, the founder or finance manager will need to physically source cash for the employee. This will take time and effort and can add even more waiting time for the employee to receive their advance.
Manually Settling Salary advances
The settlement of salary advances adds an extra layer of work for the financial department, as it’s a hassle to calculate how much an employee is owed after the deduction of their salary advance at the end of the month.
Managing Risk
As a business owner, you are taking a risk every time you give a salary advance to any of your employees. Imagine giving a salary advance to an employee and the next day this employee decides to leave the company. Who will bear the cost?
The good news!
axis provides a solution where you can manage the whole salary advance process from one dashboard, and with a click of button you can do the following:
- Select which employees are eligible for a salary advance
- Give earned salary advances to eligible employees based on the number of days they have already worked. For instance, if they have worked for 10 days of the month, they can request 10 days worth of pay in advance.
- Approve/Reject all advance requests in less than a minute.
- Automatically calculate & subtract salary advance from the employee’s monthly salary.
The brilliant part is that axis will pay the employee salary advance on your behalf (for a small fee to the employee) without charging you a single pound for it!
Interested to learn more about axis salary advances?
