3 ms·

I read that as each pay period being scaled by 26/24, which means the yearly total cost is the same, but the monthly/weekly cashflow is going to be off every no

• poulsbohemian 8y ago
  That's how I read it too, which while a bit obtuse, I can see being useful if all you are looking for is some big number that helps you with _yearly_ cost projections (but does nothing for you if your costs increase _right this minute_).
  • tlarkworthy 8y ago
    No it makes sense to smooth the numbers so your monthly costs are not wildly skewed by whether there are two or three pay periods in that particular month. Other costs will be monthly.
    • jaxn 8y ago
      Except that your expenses ARE wildly skewed by a 50% increase in labor some months. Maybe smooth is fine for modeling, but when making decisions of when to spend or not spend, you need to know when you will have money. It could be that delaying the transition to full-time by 1-2 months would have made it all work
• jessaustin 8y ago
  "Scaling" might have made sense if the average payroll were fairly constant. However, we're talking about a startup that could only adjust to demand by hiring and firing. If they served twice as many customers, they would have to hire twice as many ZAs. Thus the payroll would vary wildly from one pay cycle to the next, leave alone one month to the next. There is no purpose relevant to this firm's situation that could have been served by this particular simplification. A startup with these particular hiring needs might have been better served to chop the year into 26 periods than to bother thinking about months... a part-time CFO is unlikely to suggest that.