Entrepreneur Tips: Putting Payroll on a Credit Card


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If you’re an entrepreneur or small business owner, you should know that payroll is your most expensive liability. In my business, I burn through more money paying my staff over any other expense account. That being said, I was faced with a conundrum.

How can I use my credit card to pay my staff?

Why would you want to do this you ask? Well, there are a few reasons.  One is if cash flow’s tight and payroll is due. It’s good to have a reserve you can put on a credit card to take care of your team immediately. No one ever likes hearing the CEO say that they can’t pay their staff on time. On time payroll keeps moral high amongst the team and the business functioning smoothly until the real money kicks in. Another reason, and my main reason for doing it, is to earn points on my credit card!

There is so much value in using a credit card that earns points. I have an American Express Business Platinum and it’s like I’m part of some exclusive club.  From private airport lounges, to complementary travel upgrades,  to free wifi on flights, to entrance into that exclusive Amex lounge at Staple Center and more; membership really come in handy.  Let’s not forget to mention the fact that for every dollar I spend, I can receive multiples of up to 3x the points back.  I’ve used these points to pay for my vacations and some cool techy gadgets.

It took a lot of creative spending to get upgraded to Platinum level (which is the level right before that mythical Black Card aka Centurion Card). If I’m not mistaken, you need to have an average monthly spend of approximately $10,000. Yea, I know what you’re thinking.  That’s a lot of dough! Well, let’s put this into perspective. If you want to be invited into the Centurion Card club, you need an average annual spend of $250,000.  Sheesh!

Anyway, I’m digressing from my point. Depending on the type of business you have (and especially if you’re a small business) the most you can really put on your card is a few thousand dollars on bull sh*t expenses like booze, eating out, and miscellaneous overhead for your business. If  you really want to earn buko points, then the plan is to move payroll to your credit card.

How I Did It

Screw the days of cutting Quickbooks checks and signing them. Allow me to introduce you to Upwork.  At first glance, Upwork is just one of those freelance websites where hire people from India. However, it’s quite the contrary.  They have a very intuitive escrow system that allows employers to monitor employee work and distribute cash accordingly. Let’s not forget to mention the most important part of Upwork.  You can link it to a credit card instead of a bank account!

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There is a catch.  There is an 11% transaction fee for total hours spent.  So let’s say I have a designer that I’m paying $20/h and he worked for 5 hours.  The simple math of it is $20 x 5 hours x 11% = $111. Yea, I know 11% is a little steep but there are a few benefits that come along with the 11% additional expense:

  1. Upwork provides a clock in/clock out system that makes it easier for the employer to monitor employee hours.
  2. It automatically computes the payroll amount and disburses the funds to employees every week. This saves time and paper (…you know, for cutting those checks).
  3. This is probably the coolest feature.  It takes snapshots of the employee’s screen to make sure they are doing their work.  No need to worry about your employee’s lallygagging around all day and scrolling through Facebook on the company dime.  You can now call them out and check them if they get caught not doing their work. Peep it for yourself!
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There are a few caveats to using this system.  For example, if you have a brick and mortar store, you won’t really be able to monitor your staff’s efficiency. However, maybe the other perks from the 11% make up for that.

My Wrap Up

One of my life goals is to make it into the Centurion Club. I know it’s still a long journey away and it will require a lot of hard work. Call it pride, call it vanity, call it ambition, or call it a moral obligation. I know there will be a huge sense of accomplishment when I’m invited.  $250,000 annual spend may seem like a lot to most people but if I’m spending that much, I can guarantee I’ll be making 5x the amount or even more.

If you share the same aspirations and goals, I hope you found this post helpful. Please leave a comment, or share the page to show me some love.  I’d also like to hear some feedback on what you think! Drop me a line below, shoot me a Facebook message or Tweet!

Later hommies and have a great weekend!

 

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