Running Payroll Through a Currency Collapse: A Security Operator's Playbook

In 2019 and 2020 the Lebanese lira lost roughly ninety percent of its value and bank deposits froze. I was running a physical security company with guards on real sites across all nine governorates. Those guards had to be paid, in full, on time, every month, because a guard who is not paid does not stand a post — and because a security company that fails its own people has no standing to sell protection to anyone else.

We did not miss payroll. This is what that actually took.

I am writing it down because the business-continuity literature on currency collapse is written almost entirely by people who have not been through one, and because the advice that circulates — "hedge your exposure", "hold hard currency" — is not advice you can act on when the banking system has stopped functioning. What follows is operational, not theoretical.

What a collapse actually breaks, in order

It is worth being precise about the sequence, because each failure requires a different response and they arrive at different times.

First, the unit of account fails. Prices stop being meaningful. A contract written months ago in local currency is now a contract for a different amount of value, and neither party agreed to that. This happens before anything visibly breaks.

Second, the payment rails fail. Transfers slow, then become restricted, then become subject to conditions that change weekly. Money you have becomes money you cannot move. This is the one that most surprises people: solvency and liquidity separate completely.

Third, the store of value fails. Holding local currency for even a short period is a loss. Every day of delay between receiving and spending is a cost.

Fourth, the supplier base fails. Your vendors are going through all three of the above simultaneously. Their pricing becomes erratic not from opportunism but because they cannot price either.

Fifth, the human system fails. Staff cannot plan. A salary that was adequate is not, and the number on the payslip is no longer the relevant number.

Most continuity planning addresses the first and third and ignores the second, fourth and fifth. In practice the second and fifth are the ones that end companies.

Rule one: decide what is non-negotiable, before you need to

Before anything else, we fixed a single commitment: payroll is paid, in full, on time, in a form that holds value.

Everything else was negotiable. Margin, growth, equipment renewal, office costs, my own drawings — all of it moved. Payroll did not.

Fixing that in advance matters more than any technique, because during a collapse every decision arrives under time pressure with incomplete information, and the decisions you have already made are the only ones you will make well. A company that has not decided what is non-negotiable will discover its priorities by accident, in the worst month, and will not like what it finds.

For a security company the choice is not really a choice. Guards on post are the product. There is no version of the business that survives a month of unpaid staff, because the staff who leave first are the ones with options, and the ones with options are the good ones.

Rule two: dual-currency operations, structurally

The single most important restructuring was moving to genuine dual-currency operations rather than a local-currency business with occasional foreign-currency transactions.

That means, concretely:

Contracts denominate in the currency that matches the cost base. Where costs are in hard currency, the contract is in hard currency. Where they are not, it is not. A contract that denominates in one currency while its costs sit in another is a currency bet nobody signed up for, and one side loses it.

Every price carries a mechanism, not a number. A fixed local-currency price agreed today is a fiction next quarter. Prices that reference an agreed mechanism survive; prices that reference a moment do not.

The books hold both currencies as first-class. Not one currency with a conversion column. Two currencies, tracked properly, with the exchange treated as an event rather than a rounding step. Almost no off-the-shelf accounting package handled this properly, which is a direct reason I ended up building ZERO — a full operational ERP where dual currency is a first-class concept rather than a plugin. That is not a marketing origin story; it is what the environment demanded.

Timing becomes a variable you manage. When local currency is held, and for how long between receipt and disbursement, is an active decision with a measurable cost.

Rule three: renegotiate for mutual survival, early

The instinct in a collapse is to hold every contract to its terms, because the terms are the only fixed thing left. That instinct is wrong, and it is wrong for a commercial reason rather than a sentimental one.

A contract your client cannot afford is not an asset. It is a receivable that will not be collected, followed by a client that no longer exists, followed by a replacement client that does not exist either because everyone is in the same position.

We renegotiated across the client base, early, with a consistent principle: both sides have to be able to survive the new terms. That meant accepting less in some cases, changing scope in others, and restructuring how and when payment happened in most.

Two things made this work. It was done early, while there was still something to negotiate — a renegotiation offered after three months of non-payment is a debt conversation, not a commercial one. And it was done consistently, with the same logic applied to everyone, because a client who discovers they were treated worse than another is a client lost permanently.

The clients who came through that period stayed. That is the return on it, and it did not show up for two years.

Rule four: protect the people who are not in the room

A guard on a site does not participate in any of the above. They experience it as a number on a payslip that no longer buys what it did.

Three things mattered, in this order.

Pay in the form that holds value, to the greatest extent possible. The nominal number is not the relevant one, and pretending otherwise while everyone can see the exchange rate destroys trust immediately.

Communicate the mechanism, not reassurance. People under economic stress do not need to be told it will be fine. They need to know how their pay will be calculated next month, so they can plan. Certainty about the method is worth more than optimism about the outcome.

Shorten the cycle where possible. In a rapidly depreciating currency, the interval between earning and receiving is itself a loss. Reducing that interval is a real, immediate improvement in what people are actually paid, and it costs the company only administrative effort.

None of this is generosity. A trained guard is an asset that took time and money to produce, and there were 2,000+ trained since the company's founding in 1990. Losing them to a preventable payroll failure would have cost more than the collapse did.

Rule five: the ledger is the thing that keeps you honest

During a collapse, the most dangerous state is not insolvency. It is not knowing.

When the currency moves daily, the payment rails are unreliable and prices carry mechanisms rather than numbers, it becomes genuinely possible to run a company for months without an accurate view of its position — and to discover the truth all at once. I saw this happen to businesses around me repeatedly.

The countermeasure is unglamorous: a real double-entry ledger, closed monthly, with no exceptions. Not a spreadsheet of payments. A ledger, in both currencies, reconciled, closed on schedule.

Monthly close, no exceptions, is a discipline I hold to permanently and it comes directly from this period. The month you skip the close because it is chaotic is the month you most needed it.

This is also the honest answer to why I built an ERP. Not because I set out to make accounting software, but because I needed a system that treated dual currency, payroll under instability and bilingual reporting as the normal case rather than the edge case, and there was not one.

Rule six: your suppliers are having the same crisis

I listed supplier failure fourth in the sequence and then, in the first draft of our own response, largely ignored it. That was a mistake and it cost us for several months.

The instinct is to treat erratic supplier pricing as opportunism and to respond by shopping around. In a collapse that reading is usually wrong. Your suppliers cannot price either, for exactly the reasons you cannot, and the ones quoting wildly are frequently the ones being honest about their uncertainty. The ones quoting a stable, attractive local-currency number are the ones who have not yet understood what is happening to them — and they will either re-price mid-contract or fail.

Three things worked.

Consolidate rather than diversify. The received wisdom is to spread supplier risk. Under collapse the opposite applied: fewer suppliers, each given more volume and more certainty, produced better pricing and — far more importantly — better priority when something was scarce. A supplier who depends on you keeps supplying you.

Pay faster than the terms require. Counter-intuitive when cash is the constraint, and the highest-return decision we made outside payroll. In an environment where everyone is being paid late, being paid early is worth a great deal, and it bought availability that money alone could not.

Accept mechanism-based pricing from them too. If you are asking clients to move from fixed numbers to mechanisms, you cannot refuse the same from suppliers. Symmetry here is not fairness; it is what keeps the chain from breaking at its weakest link, which is usually the smallest supplier in it.

What did not work

Three things I tried or considered that were not the answer, stated plainly because the failures are more useful than the successes.

Waiting for clarity. There was no point at which the situation resolved enough to plan against. Decisions made late with better information were consistently worse than decisions made early with worse information, because the cost of the delay exceeded the value of the clarity.

Holding local currency for operational convenience. Every day held was a loss. The administrative convenience of a local-currency buffer was never worth its cost, and the instinct to keep one is strong precisely because it feels like prudence.

Assuming the banking system would resume normal function. It did not, on any timescale that would have been useful. Continuity plans that route around a bank are meaningfully different from plans that assume a temporary disruption, and I built the wrong kind first.

What this has to do with security work

More than it appears.

Security is a business-continuity function, and the security provider has to be continuous. A provider that fails during the crisis is worse than no provider, because you planned around them. Everything above is what it takes to be the one that does not fail.

The same discipline runs through the analytical work. Fixed cadence regardless of conditions, decisions made on schedule rather than when convenient, and a record that is closed and checkable — that is the daily Index methodology as much as it is the monthly close.

Economic stress is a security indicator. Currency movement, fuel and power availability and payment-system function correlate with security conditions on a short lag. I know that operationally rather than academically, and it is an input to the Index because of this period.

The playbook, compressed

1. Decide the non-negotiable before you need to. For us it was payroll, in full, on time, in a form that holds value.
2. Restructure to dual currency structurally, not transactionally. Contracts, prices, books and timing.
3. Renegotiate early, for mutual survival, consistently. A contract the client cannot afford is not an asset.
4. Protect the people who are not in the room. Pay in value, communicate the mechanism, shorten the cycle.
5. Keep a real ledger and close it monthly. The most dangerous state is not knowing.
6. Consolidate suppliers and pay them fast. Fewer relationships, more volume, earlier payment. It buys priority that money alone does not.
7. Do not wait for clarity. It does not arrive, and the delay costs more than the information is worth.

What it cost, and what it bought

It cost margin, growth, and three years that would otherwise have gone into building. It bought a company that did not miss a payroll, a client base that stayed, a guard force that stayed, and an operating discipline I have applied to everything since.

It also produced the software. ZERO exists because the environment demanded a system that handled dual currency, payroll under instability and bilingual reporting as the normal case. That was not the plan. It was what the plan required.

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What I bring that a continuity consultant cannot: I ran a guard force through it with payroll to meet, and the parts of this that did not work are in the article.

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Carlos Kfoury is GM/CEO of CIS Security, which has operated since 1990, and founder of RAGE X Corp.

Related: Leading Through Collapse · Building a National Security Index · Digitising the Mukhtar