Your small business probably doesn’t have a payroll team. In fact, you may not even have a full-time payroll employee. Often, the people running payroll at small companies have another entire set of responsibilities—they’re in charge of HR, bookkeeping, marketing, or some other set of business-critical tasks.\nFor this reason, your payroll software should automate as much of the payroll process as possible. Choosing the right tool helps you avoid the common payroll issues that small businesses face, freeing up your payroll manager to focus on more strategic work.\nWhat challenges do small businesses encounter during the payroll process?\nOn the surface, payroll seems straightforward: people work, log their hours, and get paid. But it’s never quite so simple. A paycheck miscalculation undermines employee satisfaction faster than anything else. Regulatory oversight leads to penalties and fines that eat into your revenue.\nThe reality: payroll is much more time-consuming and nuanced than it appears at first glance. It’s more than just collecting timesheets and cutting checks. You have to:\n\nRegister with the appropriate government agencies\nCollect multiple forms from employees\nDesignate withholding amounts for taxes and benefits\nCollect employee timesheets and calculate pay\nUpdate rates for job changes and promotions\nTrack paid time-off taken and accrued\n\nAnd most of these tasks are completed individually for every person your company pays.\nBeyond the simple time-consuming aspects of the job, running payroll has gotten more and more complex in recent years as small businesses have started supplementing their staff with freelancers and remote workers. Payroll is different for contractors, and if you hire people who live in other states or overseas, it adds another layer of complexity.\n\nThe changing workforce tops the list of the biggest payroll issues\nMore than any other payroll issues, the changing makeup of the modern workforce has created the biggest challenge for payroll professionals.\nAccording to a recent Bloomberg BNA survey, the three biggest payroll challenges are:\n\nMulti-state payroll tax compliance: Increased hiring of remote workers among small businesses has created a significant hurdle for payroll professionals. According to one payroll admin: “Keeping up with state and local regulations can be a challenge. We report to all 50 states. You must constantly read as there is no central place which houses all the information you need for payroll and payroll tax compliance.”\nWage and hour compliance: Hiring remote or contract workers presents another hurdle when it comes to paying employees: different states have different minimum wage laws, hour laws, and payday requirements, and many are also now introducing regulations for employee classifications. With companies hiring more contract workers than ever before, payroll professionals’ responsibilities have increased significantly.\nBalancing costs while maintaining efficient payroll: With payroll tasks becoming more complex, many small businesses have turned to outsourcing through a full-service payroll provider. But the costs aren’t minimal: a 10-person company could pay more than $3,000 per year for payroll outsourcing.\n\nPayroll mistakes have serious consequences\nSo why is it important to eliminate the common issues small businesses face when it comes to payroll? Even small mistakes have costly consequences.\nFor example, in a lessons-learned from Seth Bannon during his time as Founder and CEO of Amicus, Bannon describes how a payroll mistake nearly cost him his business:\n“I hired our first accountant this year… He noticed there hadn’t been any payroll tax payments coming out of our bank account. Impossible, I thought, Bank of America’s payroll system automatically withholds payroll taxes every month, it’s all automated. But it wasn’t… Cleaning up this mess cost the company over half a million dollars.”\nWhen Preston Demolition made a simple payroll mistake that led to an employee being shorted $608 of overtime pay, the ensuing legal proceedings ended up costing the company more than $40,000 in awards to the employee and responsibilities for paying for the employee’s legal fees.\nUnfortunately, these types of mistakes aren’t uncommon. In fact, Bloomberg BNA estimates that U.S. businesses paid nearly 7 billion in IRS penalties in 2013 alone due to payroll mistakes.\nIn better news, the solution to the biggest payroll challenges doesn’t have to be complex. You just need the right payroll software: a tool that makes it easier for your payroll administrator to comply with regulations, collect timesheets and pay employees the correct amount every time.\nWhat do payroll professionals need from their payroll software?\nA 2018 survey from Kronos uncovered the three most-desired features of payroll software:\n\nOn-demand reporting and analytics\nSeamless integration with time and labor management\nThe ability to track multiple worker classifications\n\nTo keep up with the impacts of the changing workforce on payroll, your company needs an online tool that provides detailed reports, tracks time, lets you set up pay periods and set rates, sends payments automatically, and integrates with the other tools and systems your company uses—all for a price your small business can afford.\n\nSimplify payroll with Hubstaff\nHubstaff’s time tracking and payroll tools can alleviate many of the issues small business face when it comes to paying employees and contractors.\nFirst, Hubstaff is an automated time tracking tool. Hubstaff runs in the background on your team’s desktop or mobile devices, tracking the time they work down to the second. It helps you track overall time worked as well as time toward specific clients, projects and tasks, ensuring your payroll checks and client invoices are always accurate.\nSecond, Hubstaff automatically organizes time tracked into detailed reports. These reports are highly customizable—letting managers and payroll administrators see and pull the exact information they need—and can be downloaded or emailed as needed.\nThird, Hubstaff lets you set up automatic payroll payments. Simply set pay rates for each employee and establish your pay periods, and Hubstaff automatically sends payment to employees—via PayPal, Payoneer, TransferWise or Bitwage—based on time logged and without any involvement from payroll. But if you want to process payments manually, you can do that, too.\nFourth, Hubstaff integrates with more than 30 other tools and apps. Hubstaff integrates seamlessly with dozens of popular workplace tools and applications, letting you connect the dots between your project management, payment, and help desk tools effortlessly.\nFinally, Hubstaff is an inexpensive solution to your biggest payroll problems. The Premium plan includes time-tracking, automatic payments, and unlimited integrations, and starts at about $10\/user per month. That’s less than the cost of the least expensive QuickBooks Online plan, and a drop in the bucket compared to what you’ll pay to outsource your payroll needs.\nHubstaff was designed with remote and distributed teams in mind. In fact, Hubstaff itself is a fully remote company that uses its own tool to pay a large team of independent contractors.\nThe benefits of an automated payroll and time-tracking solution\nChoosing the right tool for your small business payroll solution is key to the health of your business. The right tool lets you spend less time calculating and manually entering data, reducing the likelihood of mistakes. It sends payments automatically, ensuring employees are paid the right amount, on time, every time.\nThe bottom line: the right software reduces the overwhelming administrative work of managing payroll.\nThat means your payroll managers have more time to focus on getting things right and avoiding costly mistakes. And those who manage payroll on top of their other responsibilities can spend less time manually pulling timesheets and sending payments—and more time on the types of tasks that truly move the needle for your business.