Common Problems of Your Payroll Processing And How To Fix It

Misclassifications, poor time tracking, and cost are all common reasons why payroll processing doesn’t work. You can quickly fix these issues with a good payroll system. Check its status periodically and contact a payroll representative if you notice any problems. In some cases, it might be the payroll software itself. In this case, getting a payroll solution from an experienced company specializing in payroll processing is more important.


If your company isn’t processing payroll correctly, you could be violating the Fair Labor Standards Act, which requires employers to classify their workers correctly. This could result in misclassification and incorrect pay, which could cause back pay for employees. For example, the US Wage and Hour Division recovered a record $322 million back pay in 2019 alone. In addition, this can create trust issues among employees and cost your organization money.

Despite how complex federal, state, and local taxes are, businesses must implement proper processes to calculate overtime and streamline leave policies accurately. Companies that don’t follow appropriate methods risk being audited or sued for misclassifying employees, resulting in huge penalties and lawsuits. Fortunately, payroll processing can make these headaches a thing of the past. By implementing automated time and attendance solutions, you can enjoy the convenience of automating many of these tasks.

Poor Time Tracking

Time tracking is an essential task for companies, but many fail to use it properly, leading to inaccurate and incomplete data. As the ADP solution does, the best way to make time tracking a valuable part of your business is to make it a top-down initiative – the bosses should not micromanage the employees but use it themselves and reveal the results if needed. Doing this will build trust and transparency, as you can quickly answer questions about time tracking.

To ensure that time tracking is accurate and complete, you should use a time-tracking system that asks for a description and a project number for each entry. Detailed reports are only necessary if you’re trying to justify the time the employee spends. Make sure to check the features of each program before purchasing one. Poor time tracking is a common reason why payroll processing doesn’t work – and how to fix it.

Lack of Integration with Other Business Systems

If your payroll processing software doesn’t integrate with other business systems, it can pose a significant problem. Not only will the system not be combined, but it may also conflict with other software in your company. If you need to change your payroll information on other software, you may find it challenging to do so manually. You could risk losing valuable time if you cannot integrate your payroll system with other systems.

You may have a standalone time and attendance process that requires duplicate data entry. You could incur additional costs if your payroll software doesn’t integrate with other business systems. You could also invest in a workforce management solution that integrates with time and attendance. An integrated time and attendance system can also reduce payroll errors. The IRS estimates that payroll errors cost billions of dollars each year.

Cost of Payroll Processing

You may be wondering how much your payroll service provider charges. Payroll service providers usually charge a monthly base account fee and may include a one-time set-up fee. The cost will vary depending on your needs and the number of employees you have. Some payroll providers even publish their prices online. Payroll services are designed for small businesses and can cost as little as $65 per month.

While you should look for a company that offers low prices, some costs are associated with these services. For example, you may have to pay a set-up fee if your payroll processing isn’t working correctly. You should also expect a monthly or annual fee for the service. Whether using a payroll service or hiring a payroll service provider, it would help if you had a ballpark figure in mind before signing up. That way, you can avoid overspending on extras you don’t need.