Knowledge · Applies to all markets · 2026/27

Can I afford payroll this month? How AI checks payroll against cash

AI can check payroll against the cash you will have on the pay date, not just today's balance: it counts the payments due before payday, the customer receipts you are expecting, and payroll tax already falling due. Nella runs that check with and without overdue receipts, so you can see whether payroll clears outright or only if late customers pay.

Why “can I afford payroll?” is harder than it looks

Most owners check the bank balance a few days before payday. That answers the wrong question. What matters is the cash on the pay date itself, after the bills, tax and direct debits due before it, and before the customer payments you are hoping will arrive in time.

Payroll also brings its own dates. In the UK, payroll is reported to HMRC on or before payday and the tax and National Insurance are paid the following month, so one month’s payroll touches cash twice.

Two separate checks

Nella’s Payroll role answers two questions, and keeps them apart because they measure different things.

Check What it measures When it helps
Payroll affordability This month’s estimated payroll against the cash you hold now, with the ledger accounts it summed and a result: clears comfortably, tight or shortfall A quick read on whether payroll is in proportion to cash
Payroll headroom Cash on the pay date itself, before and after payroll, counting the receipts and payments due before it Knowing whether the pay run clears on the day

When the two differ, Nella gives both and says what each measures. It does not combine them.

With and without overdue receipts

The headroom check runs twice: once counting every customer payment due by the pay date, and once leaving out the ones already overdue. If payroll clears only in the first case, the honest answer is “only if those customers pay”, and Nella names the customers. Chase messages for them are on the team board, drafted for you to approve. See Can AI chase unpaid invoices for me?

Where the figures come from

  • The pay date: the date you gave, your payroll software’s pay calendar, or an assumed date. Nella says which.
  • The payroll amount: the forecast’s payroll line, with its source and confidence. A run-rate estimate is labelled as an estimate, not presented as the actual pay run.
  • Payroll filing and payment dates: from the obligations timeline for your jurisdiction. If none are held, Nella says so rather than saying none are due.
  • Everything counted once. Tax and payroll payments already in the forecast are not subtracted again.

UK payroll dates

From GOV.UK and GOV.UK: Pay employers’ PAYE, for the 2026/27 tax year:

  • Send the Full Payment Submission (FPS) on or before your employees’ payday.
  • Pay PAYE to HMRC by the 22nd of the next tax month if you pay monthly, or by the 19th if you pay by cheque through the post.
  • If you pay quarterly, pay by the 22nd after the quarter ends, for example 22 July for the 6 April to 5 July quarter.

What it does not do

Nella does not run payroll, calculate anyone’s pay or tax, or pay employees or HMRC. It does not decide whether a pay rise or a new hire is affordable; it shows what cash looks like with it, and the decision is yours. A what-if on the monthly projection shows the effect of a hire on cash over the coming months.

Example · illustrative figures

An owner asks on the 20th: “Can I pay the team on the 28th?” Payroll is about £24,000, taken from the payroll accounts in the ledger. Counting every receipt due by the 28th, cash after payroll is £6,200. Leaving out the £10,900 already overdue from three customers, it would be £4,700 short. So payroll clears only if those customers pay. The PAYE for last month, due on the 22nd, is already counted in both figures.

Related: What is an AI finance team?

Sources

Nella provides financial information and education, not accounting or tax advice. Nella shows you the numbers. When a question needs professional judgement, such as a filing or a tax decision, Nella says so and points you to a qualified accountant.

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FAQ

Questions people ask

Does Nella run my payroll?
No. Nella reads your books and checks whether payroll clears on the pay date. Payroll is run in your payroll software, and pay and tax are paid by you.
Why are there two answers, with and without overdue receipts?
Because the first assumes late customers pay before payday and the second does not. If payroll clears only in the first, it depends on those customers, and Nella names them.
When must UK employers pay PAYE?
For the 2026/27 tax year, by the 22nd of the next tax month if paying monthly, or the 19th if paying by cheque through the post, according to GOV.UK.
Can Nella tell me whether I can afford a new hire?
It shows what cash looks like with the hire, using a what-if on the monthly projection. Whether to hire is your decision.