5 Pain Points of Small Business Payroll – and How Smart Technology Can Help Solve Them

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Payroll is complex. Tax laws are ever-changing. And paying your people is often last on your to-do list (but first on the list of things that keep you up at night). Luckily, small business payroll systems have come a long way in the last several years. Many of today’s payroll platforms have allowed small business owners to move away from tedious and confusing manual processing, with automated payroll increasing accuracy and efficiency.

But the best modern payroll solutions don’t just automate payroll; they leverage smart technology to make the busy lives of small business owners more convenient and productive. These intelligent payroll systems do more than just keep up – they stay ahead. They get to know your business and your preferences, analyzing them to provide increasingly personalized service. They use data to identify possible improvements to streamline processes. And they tackle tasks for you to eliminate lost or wasted time and free you up to focus on the work that matters most.

Indeed, emerging, AI-based technologies are improving on older, more standard payroll platforms’ frustrating flaws. That’s why we’ve listed five common pain points of small business payroll and how you can combat these challenges with newer, smarter software platforms.

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5 common pain points of small business payroll

As a small business owner, you probably know these common pain points of small business payroll far too well.

1. Payroll is complicated.

If only payroll could be as simple as regularly paying your employees fixed amounts. Instead, you have to deduct taxes and perhaps benefits and retirement account contributions from every paycheck.

Of course, when paying independent contractors, you won’t deduct taxes, but you’ll still have tax recordkeeping obligations – you can’t forget about 1099-NEC forms. These forms were first introduced in 2020 after decades of 1099-MISC use, and this switch points to a big pain point with payroll: Tax laws never sleep. Their constant changes can make payroll so complicated that you might not even know where to begin.

That said, many modern payroll software programs take the painstaking manual number-crunching out of taxes, and some are regularly updated to reflect the newest tax laws. Although these features minimize error and streamline tax calculation and employee payments, they only keep your business on track rather than ahead of the curve.

Newer AI-powered payroll apps, on the other hand, learn your payroll inside and out to personalize your service and maximize efficiency and accuracy. This way, your payroll process never misses a beat, and you never have to learn the ins and outs of tax laws – leaving you free to focus on what matters the most for your business.

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2. Payroll platforms aren’t always user-friendly.

Successfully running a business means using all kinds of software platforms to keep your company organized and on track. But that doesn’t mean your software is easy to use – and sometimes, payroll platforms are the worst offenders.

Despite improved user experiences in recent years, almost all of today’s payroll systems still rely on navigational structures that require you to hunt and click through layers of information, with dashboards that aren’t all that helpful. You need to know what you’re looking for and where to find it, and it’s not often intuitive.

While today’s payroll systems might look nicer than the payroll systems of the past, they still lack familiarity, especially compared to more innovative payroll platforms that leverage modern consumer technology to make paying your people (and other important tasks) easier and faster than ever – in some cases as simple as sending a text. For example, a simple “create 1099” text to your payroll app near-instantly generates your contractor’s Form 1099-NEC – no confusing dashboard navigation required.

3. Payroll is time-consuming.

Small business owners are always on the go with little time to spare. But it’s still very common to have to schedule large blocks of time to sit down and manage payroll.

While business success is largely about profit and loss, time is just as important a resource for a small business. That’s part of why payroll software first came to be: It saves invaluable time on calculating payroll and storing and accessing employee pay data. However, on the time-savings front, payroll software still lags: An American Payroll Association survey found that one-third of small businesses spend at least six hours per month on payroll.

It doesn’t have to be this way. Today’s most modern payroll apps, powered by AI, are purpose-built for ease, mobility, and flexibility, sending you proactive alerts and allowing you to manage payroll and related tasks with only a few taps on your phone. This means you can pay all your employees in under a minute – and if you’re really feeling good, you can give a deserving employee a raise just as quickly.

4. Payroll means admin work.

Even if you’re not processing payroll manually, paying your people can still be a major administrative burden as employees onboard, offboard or change their information. The burden of entering, updating and maintaining all of that information often falls on the small business owner.

Many of today’s payroll systems give employees access to software to manage their own information – but just as there’s a learning curve for employers with most payroll systems, there’s one for employees. That often results in questions and confusion that redirect back to you. This costs you time that you could be using for more strategic work.              

With smarter, more intuitive payroll platforms that leverage familiar conversational interfaces, your workers can input their own information upon being hired, update information such as their home address and their tax withholdings, view their pay statements, auto-generate their own W-2s, and so much more – all in a matter of seconds via chat interface from their phones.

5. Payroll platforms don’t always prevent inaccuracies.

Whatever payroll platform you use, you’ll likely always worry that somewhere, somehow, the process is going wrong. It’s a reasonable worry: Despite the improvements that payroll software has brought to small business operations, the aforementioned American Payroll Association survey found that the IRS levied nearly 5 million payroll tax penalties in 2019. These penalties totaled a whopping $13.7 billion.

Tax penalties remain prevalent despite payroll software’s omnipresence, because payroll platforms are reactive, not proactive. The big exception is the new class of intelligent, AI-powered payroll tools that learn your payroll so well that they can identify and alert you to flaws before they become problems.

With these tools, you can be more confident that you won’t misclassify contractors as employees, exclude necessary tax or benefit deductions, or issue inaccurate paychecks. Instead, your payroll operations will be near-perfect – especially if your AI payroll tool is backed by a leading name in payroll compliance and execution.

How innovative payroll processing solves these problems

The problem with today’s payroll systems isn’t one of comprehensiveness or even automation. Instead, the most critical challenges include a lack of the intelligence, intuitiveness, and flexibility that make processing payroll noticeably faster, easier, and more accurate. Some payroll processing companies have begun rolling out solutions that leverage smart technology to address these challenges.

Roll by ADP, for example, uses AI to stay ahead of payroll tasks and deadlines for you. That means more than automated payments come payday – it alerts you when payday is coming up, maintains a timeline of to-dos for you, and even analyzes your payroll in real time and alerts you when it’s not in line with your normal payroll run to ensure accuracy.    

Roll incorporates text-based chat commands to make for an intuitive user experience. The payroll app uses a first-of-its-kind chat-based interface to help you manage payroll and related tasks as easily as sending a text message. For example, as Tax Day approaches, you can generate employee W-2 forms by simply texting “create W-2” in the Roll app.

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.

Click here to get started with Roll. You’ll get more than peace of mind about your payroll; you’ll also get time back for everything else.

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