Payroll Services: 5 Payroll Mistakes Small Businesses Make (and How to Avoid Them)
4 min read
Most small business owners didn’t get into business to manage payroll—but it quickly becomes part of the job. You might be handling it yourself, relying on a trusted employee, or even having a family member pitch in. And while things may seem fine on the surface, one late filing or missed paycheck can turn into a bigger issue than expected.
The truth is, payroll mistakes don’t just affect your books—they affect your people. They can lead to unhappy employees, government penalties, and a whole lot of time spent cleaning up problems that could’ve been avoided in the first place.
In this article, we’ll break down five of the most common payroll mistakes we see small businesses make, along with practical tips and how Cadence helps our clients avoid these headaches completely.
Missing payroll tax deadlines means immediate penalties, mounting interest, and unwanted attention from the IRS. It's one of the quickest ways to lose money—and peace of mind.
Manual tracking systems make it easy to forget or miscalculate due dates. Instead, automated reminders or a reliable outsourced provider can do the heavy lifting for you.
We file your federal, state, and local payroll taxes on time—every time. Our system handles tax deposits and filings so you don’t have to think about it. We also monitor for changes in compliance rules, so nothing slips through the cracks.
Contractors work independently. Employees don’t. That line can get blurry, especially in service-based businesses. Misclassify a worker and you risk back taxes, penalties, and even lawsuits.
This isn’t just a paperwork problem. It can trigger audits, and correcting it often means retroactive payments and legal fees.
We provide resources and support to help you navigate worker classification and document employee status. Our team monitors changes in federal and state laws, helping you stay informed and reduce risk.
Paper timesheets and manual entries are a recipe for errors. Missed overtime or incorrect deductions can lead to wage disputes—and damage employee trust.
Accurate records should include time worked, wages paid, PTO accrued, benefits deductions, and any changes in employment status.
How Cadence Helps:
Our platform integrates timekeeping, payroll, and benefits in one place. You’ll have an accurate digital trail of every payroll run, employee update, and time-off request. Plus, our team double-checks your setup to make sure everything is legally sound.
Every state—and sometimes every city—has its own rules for payroll taxes, minimum wage, and paid leave. If your workforce is remote or expanding, this becomes even harder to manage manually.
From paid sick leave to mandatory notices, local regulations add layers of complexity most small business owners don’t have time to deal with.
We’re built to support businesses operating across multiple jurisdictions. Our payroll software and team account for local, state, and federal requirements so you're covered no matter where your team lives or works.
Having one person manage payroll with no checks in place makes your business vulnerable. If something goes wrong, it’s usually discovered too late—when the damage is already done.
Establish a review process. Better yet, put your payroll in expert hands with built-in accountability.
We give you a dedicated payroll specialist who understands your business and is there to support each payroll cycle. With expert guidance at your side, you can feel confident your team gets paid accurately and on time.
Most small business owners we work with aren’t trying to cut corners—they’re just overwhelmed and want to do things the right way. But when payroll gets added to an already full plate, it’s easy to let things slip. Unfortunately, payroll mistakes rarely stay small.
At Cadence, we’ve helped hundreds of businesses implement reliable, compliant payroll processes that reduce risk and give you time back in your day. Whether you’re just getting started or growing fast, we’re here to help you stay on track—and out of trouble.
Let’s talk through your payroll process and show you how we can help clean up what’s behind the scenes so you can stop worrying about missed filings, IRS letters, or late-night Venmo reimbursements.
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