Small Business Payroll

5 Small Business Payroll Problems And How to Solve Them

If you are a business owner, then it is important to properly organize your payroll and payroll costs. Here are 5 small business payroll problems, and how to solve them.

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Every business owner will agree that the payroll process is complex. Payroll and employment tax laws change from year to year and keeping up with those changes can feel like a full-time job on its own.


Your business payroll (aka making sure your people get paid) is always on your mind but often gets pushed to the bottom of your to-do list. Fortunately, small business payroll systems have come a long way in recent years.

payroll tax

With the help of many of today’s payroll platforms, small business owners have been able to free themselves from the tedium and confusion of manual processing. In addition, automated payroll programs provide increased accuracy and efficiency.

Increased accuracy and efficiency are great, but the best modern payroll solutions don’t just automate payroll, they use smart technology that makes the (often) chaotic days of small business owners more convenient and productive.


These smart technology using payroll systems do more than just keep up with the chaos, they stay ahead of the curve. How? By getting to know your business and your preferences and analyzing your operations to provide increasingly personalized service.

Modern payroll solutions use data to identify possible improvements and ways to make your processes – and your life – more effective and efficient. They streamline your workflow and tackle tasks that help you maximize your time and free you up to focus on the work that matters most to you.

AI-based technologies are improving on the frustrating flaws of the older, more standard payroll platforms and giving them a much-needed refresh.

In this article, we’ve outlined the five most common payroll issues faced by small businesses and how newer, smarter technology can make them a distant memory.

Difficulties of Small Business Payroll

There are a wealth of small business tools available today but as a small business owner, it’s likely that the following issues remain issues.

You may have even started incorporating the management of these pains as part of your small business plan. But don’t give up hope, there is a light at the end of this tunnel.

1. Payroll is Complex

It would be so simple if you just had to pay your employees the same amount every cycle. Instead, there are taxes to deduct and benefits to determine the value of, and perhaps retirement account contributions, just to name a few of the things payroll processing has to account for.

If you’re paying independent contractors, you won’t deduct taxes, but you’re not in the clear with those, either. You’ll still need to file the 1099-NEC forms!

The 1099-NEC forms were first introduced in 2020, replacing the 1099-MISC that we’re all so familiar with. This switch is just an example of one of the big pains of payroll which is: Tax laws never sleep.

The constant changes to tax laws and required forms for submission can make payroll so complicated that you feel lost before you even begin!

Modern payroll software programs relieve users from the dreaded manual number-crunching and some are regularly updated to keep up with changing tax laws. While these features certainly help to minimize errors, streamline tax calculation, and get your people paid on time, they only keep your business on track, they don’t help you get ahead.

The newer AI-powered payroll apps use their constant analysis of your business to customize your service not just once but on an ongoing basis. Your payroll process never misses a beat and moves with you, not against you, and all the while, you don’t have to remember anything about those pesky tax laws.

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2. Payroll Platforms Can Hard to Understand

You’ve lost track of how many software platforms you’ve had to add to your small business operations to keep it organized, on-track, and competitive. If only these platforms were easy to use! Unfortunately, payroll platforms can be some of the worst offenders in this category.

Most of the payroll platforms in use today still rely on navigational structures that start you off in dashboards that really don’t help and still require you to hunt and click through layers of information. You need to know what you’re looking for and where to find it or you’ll be sitting there for a while.

So yes, it is true that modern payroll systems have improved user experience, but then again…almost anything is an improvement from the manual number-crunching of yesteryear.

Today’s payroll systems certainly look prettier than their predecessors, but looks aren’t everything. They’re still missing the familiarity and adaptability that more innovative payroll platforms offer by leveraging modern consumer technology to make paying your people (and lots of other important tasks) easier and speedier than ever.

With some of the newer AI-powered platforms, it’s as simple as sending a text message! For example, a simple “create 1099” text to your payroll app immediately generates a 1099-NEC form for your contractor – no confusing dashboard or layers of information to click through. Just a quick text and hit send.

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3. Payroll Takes Too Long to Process

You’re always on the go, you don’t have time to waste re-learning what you forgot about payroll taxes! But if you’re like most small business owners, you schedule large chunks of time to try and make sense of and appropriately manage your payroll.

Business success is often measured by profit and loss but time is a vital resource for a small business. Saving time was a significant factor in the development of payroll software.

Payroll software can save you precious time that would have been spent laboring over payroll calculations and organizing and storing employee information. But there’s still something missing because small business owners are still spending way too much time on payroll.

Don’t be discouraged, it doesn’t have to be this way! Modern AI-powered apps are built for speed – mobility, ease, flexibility, and speed.

Proactive alerts give you the ability to manage payroll and its many related tasks with just a few taps on your phone. This translates to your employees getting paid in less than a minute, you feel great the rest of the day, and hey – maybe you can give a deserving employee that pay raise you’ve been meaning to give them while you’re on a roll.

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4. Payroll is Tasking

Despite eliminating the dreaded manual processing from your payroll process, getting your people paid accurately and on time can still be an administrative nightmare. Keeping up with new and departing personnel and changes made to employee information can be overwhelming and those things still fall on the shoulders of the small business owner.

Many of today’s payroll systems provide an employee portal, where employees can log in and manage their own information. This can be helpful but there’s still the issue of a learning curve, this time for the employee.

New systems can confuse and frustrate your people and cause a different kind of nightmare for you because you’re the one they come to with their issues. So much for the time, you were supposed to be saving, now you’ll spend it counseling and training your employees.

The AI-powered payroll platforms are smarter and more intuitive; they provide familiar, conversational interfaces that are user-friendly. They allow your employees to enter and maintain all their information, from contact and mailing addresses and phone numbers to tax withholdings and generating their own W-2s – all in a matter of seconds and as easy as texting, right from their own phone.

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5. Payroll Errors

No matter which payroll platform you employ, the reality is that you’ll probably always worry that somewhere, somehow, something went wrong. That’s a reasonable concern because, despite all the improvements that today’s payroll software has made to the payroll process, the IRS has still found reasons to issue penalty fees for payroll taxes.

Yes, even with the upgrade that modern payroll software provides, tax penalties are still a valid concern for small business owners because they’re still simply reactive, not proactive.

The new class of AI-powered payroll tools changes all that with their intuitive capabilities that can identify and alert you to any errors before they become problems – or incur penalties. With these tools in your arsenal, you’ll be confident that your contractor hasn’t been misclassified as an employee or that you excluded a necessary tax break or benefit deduction, and there won’t be an employee strike because paychecks will be paid correctly and on time.

Your confidence level will soar even higher if you choose one of the AI-powered payroll tools that are backed by a leading industry name in payroll compliance and execution.

Solving Payroll Issues | The Easy Way

The problems with the payroll systems used today aren’t issues of comprehension or automation. The most critical challenges instead stem from the missing pieces of intelligence, intuitiveness, and flexibility that can make the payroll process significantly less complicated and oh so much faster.


There are a few payroll processing companies that have started rolling out payroll solutions that incorporate some of the smart technology we’ve discussed in this article.

For example, Roll by ADP uses AI to stay ahead of payroll tasks and deadlines for you by not only automating payments on payday, but reminding you when payday is approaching, maintains a timeline of tasks for you to check off, and even analyzes your payroll in real-time, alerting you to any abnormalities found in the current batch.

Roll focuses on chat commands over traditional dashboards to make payroll as user-friendly as possible for small businesses like yours. Rather than you logging in to your payroll dashboard from your laptop or desktop, Roll starts the process for you, and with just one or two text commands, you can complete payroll in under a minute right from your phone – no desktop, laptop, or even desk required.

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