Key takeaways
- Salary payments are the compensation a company provides to employees under agreed terms, including salaries, wages, bonuses and benefits.
- Main types include base salary, hourly wages, overtime pay, bonuses and incentives, equity compensation and paid time off.
- Paying on time and in the correct amount helps reduce employee turnover and avoids disruption to business operations.
- Salary payments are predictable and recurring, so they can be included in 13-week treasury forecasts and long-term cash budgeting.
Introduction to salary payments
Salary payments are the compensation a company provides to its employees under agreed-upon terms in exchange for their job performance. This includes not only salaries and wages but also bonuses and benefits. They are a major cash flow component and often represent a significant portion of a company’s operating expenses.
Main types of salary payments
Salary payments can be categorized based on their nature, purpose, and the way they are calculated. Below are the main types:
- Base salary
- Hourly wages
- Overtime pay
- Bonuses, incentives, and benefits
- Equity compensation
- Paid time-off (e.g., vacation, sick leave)
How to manage salary payments
Making salary payments on time and in the correct amounts is key for reducing employee turnover, preserving the company’s reputation, and avoiding any disruption to business operations.
These payments are often a predictable, recurring expense that allows for accurate forecasting and budgeting. They can be included in both shorter-term treasury forecasts (typically with a 13-week time horizon) and long-term cash budgeting, where considerations should include salary increases, hiring plans, and potential bonuses.
Many companies also implement a payroll management system to automate salary calculations, deductions, and payments. These systems can often be integrated with your ERP to ensure your accounting records are kept up-to-date automatically.
How Atlar can help with salary payments
Atlar offers built-in cash flow forecasting for up to 13 weeks into the future, with data synced from your banks and ERP. Upcoming salary payments can be automatically categorized and fed into your forecast from your accounting records. You can also input data manually to update your forecast in real time, helping you assess the impact of changes in headcount or compensation levels.
