Unfortunately, many small businesses continue to pay their employees weekly. Payroll processing and administrative costs for small businesses are quite high mainly because small businesses don't have the sophisticated payroll processing systems that larger businesses with a greater number of employees can afford. Paying employees weekly only compounds this already expensive process, not to mention the time spent by you or your employee preparing payroll checks and updating payroll records. Stopping the weekly payroll routine will definitely minimize your expenses, provided that your state law doesn't require weekly paychecks.
Switching to a bi-weekly payroll can reduce payroll processing and administrative costs by 20 percent to 50 percent; a significant decrease just by reducing the number of payroll periods. Switching to a bi-weekly payroll can also improve your cash flow since it allows you defer the payment of payroll.