Simon also calculates their holiday pay, and checks he’ll have enough incoming cash flow for the post-closedown pay round.
But employees are legally entitled to be paid for holidays before they take leave. This is to ensure they aren’t left out of pocket by holiday expenses.
In a panic, Simon realises he doesn’t have enough cash flow to pay his employees before the holiday period.
He uses money from his personal bank account, and realises he must budget in future to pay his employees before they take holiday leave.