Ep 32: The Payroll Power Move That Saves Small Businesses Six Figures
🌐 Website: www.magnethrgroup.com
By Sherry Sutton | Heart of the Hustle Show
Discover the payroll strategy that’s saving small businesses six‑figure dollars. In Episode 32 of Heart of the Hustle, I walk you through the challenge, the surprise solution, and exactly how you can apply it in your business—so you stop losing money and start reclaiming profit.
Introduction
When I invited my guest Rory onto the Heart of the Hustle podcast for Episode 32, I already knew we were going to peel back one of those hidden profit drains that most entrepreneurs don’t even realize they’re dealing with: payroll. Yes — payroll isn’t just about paying your team. It’s one of the biggest opportunities small businesses have to stop leaking money … and with the right move, to save six‑figures. In this blog, I’m going to walk you through our journey: the problem, the frustration, the turning point, and the actionable solution. If you’re a small business owner (and let’s face it — most of you reading this are), you’ll want to stick with me.
The Context: Why Payroll Feels Like a Necessary Evil
Running a small business often feels like you’re juggling ten other businesses at once: operations, marketing, sales, product development, team hiring, retention, and yes — payroll. The moment you hire someone, you’ve committed to more than just their salary. You’ve committed to compliance, taxes, benefits, record‑keeping, deduction management, time tracking, and more. According to one resource, online payroll services can help small businesses save time and cost—and help them stay compliant. (Meru Accounting+2QuickBooks+2)
Many entrepreneurs tell me: “Sherry, I just pay my team and hope I’m doing it right.” That hope is not a strategy. And when hope is your payroll strategy, you’re exposed to errors, penalties, morale issues, and hidden costs. The bigger the team grows, the bigger the risk and the greater the missed opportunity.
Problem: The Hidden Costs of “Just Doing Payroll”
Let’s talk about what I call the quiet bleed from many small companies. It’s not obvious in your P&L line‑by‑line. It shows up as:
Mis‑classification of workers: Employees vs contractors. This alone can trigger major fines. Gusto+1
Incorrect tax withholdings and missed filings: Taxes go unpaid or filed late; you’re hit with penalties. Gusto+1
Time wasted on manual or inefficient payroll systems: That’s hours you can’t spend growing your business. QuickBooks+1
Lack of visibility into labour cost, overtime, benefits leakage: When you don’t have good payroll data, you don’t know where your money is going. hrhub.app
Poor employee experience: Late pay or errors damage morale, retention, and ultimately your talent brand.
Let’s put a number on it. Imagine your business with 30 employees. A mis‑classification, an overtime calculation error, or a tax penalty could easily cost you tens of thousands of dollars. Extend that across a few years, add in the opportunity cost of mis‑allocation of labour, and yes — you’re looking at six‑figures lost.
Agitation: The Moment You Realize It’s Getting Ugly
Here’s where I want you to pause and reflect. You know you’ve got a growing team. You’ve got momentum. But you also feel the admin burden rising. Maybe you’ve outsourced parts of payroll, maybe you’ve just got spreadsheets and hope. Either way — you feel the toll: less time for your vision, more firefighting, team confusion, delayed pay, and you ask: “Am I leaving money on the table because I’m treating payroll as a cost centre instead of a strategic one?”
That tension — between growth and margin — is where the power move resides.
You may be paying your team, but are you strategically optimising payroll so every dollar is working for you? If not, you’re letting money slip through the cracks.
The Turning Point: Discovering the Power Move
What we discovered with Rory is that there is a simple yet often overlooked strategy in payroll that flips the script: treating payroll not just as a liability to manage, but as a strategic lever to optimise workforce cost, compliance, and leverage technology for scale. In our episode we defined the move as:
“Running your payroll like a profit centre, not a cost centre.”
When you make that shift, what happens is business‑changing:
You reduce risk (less fines, less errors).
You free up time (automation, outsourcing, smart tooling).
You gain insight (labour cost analytics, overtime triggers, headcount planning).
You reclaim margin, which adds up to six‑figure savings over time.
Research backs this up. Using digital payroll and modern software gives small businesses time savings, cost reduction, and compliance support. hrhub.app+1 And, even services like QuickBooks’s payroll report average cost savings of 4.64% in gross payroll costs. QuickBooks
The Solution: Step‑By‑Step To The Payroll Power Move
So how do you make this work? Here is the roadmap I laid out in the episode and want to recap here for you to follow.
Step 1: Audit Your Current Payroll State
Look at the last 12‑24 months: how many employees? How many contractors? What’s your overtime cost? How many times did you have errors or corrections?
Ask these questions:
Are any team members mis‑classified?
Are we losing time to manual checks, spreadsheets, or reconciliation?
Do we have full visibility on overtime, benefits, deductions, and how they trend?
Are we paying for tools or services that duplicate work or have low ROI?
Step 2: Benchmark and Set Target Metrics
Set your “pain” number: e.g., we spend X hours per pay run; we’ve had Y tax issues or corrections; we pay Z in overtime that seems excessive.
Set a “profit” number: if we reduce errors to zero, automate run time by half, and limit overtime growth, how much margin opens up?
Use a target like “save 5% of payroll cost” or “reduce overtime by 20%” — measurable wins.
Step 3: Choose the Right Tech + Partner Mix
Use cloud‑based payroll software that includes tax filing, time tracking, compliance updates. Teachers like automation don’t just save you time—they save money. knitpeople.com
Decide what to outsource vs in‑house. Sometimes the right payroll partner (or HR/p‑roll vendor) removes risk and gives you back headspace. ADP
Make sure the tool integrates with your time‑tracking, accounting, and team systems. If your systems are siloed, you’ll leak costs.
Step 4: Design a Strategic Payroll Policy
Define pay schedules, overtime rules, benefits deductions, classification standards.
Make sure you have processes for approvals, audits, and corrections.
Educate your leadership/team on payroll implications (because team changes affect payroll cost, classification, benefits etc).
Step 5: Use Payroll Data as a Business Lever
Run metrics monthly: labour cost by department, overtime hours, benefit enrolment rates, error frequency.
Use those insights to decide: hire vs outsource, reclassify vs contractor, invest in tools vs manual work.
By tracking these metrics, you shift payroll from administrative fluff to strategic decision‑making.
Step 6: Monitor, Adjust, Scale
Every quarter, review: What changed? Did we hit our target savings? Where did we miss?
Use the employee/dept data to forecast: If we hire 5 more people, what’s the real payroll cost impact (including tax, benefits, admin) not just salary?
As you grow, your payroll infrastructure must scale. If you’re still using spreadsheets at 50 employees, you’re braking growth.
Why This Move Saves Six‑Figures
Here’s how small savings add up to major impact:
Saving 5% of a $2 M annual payroll = $100,000.
Reducing overtime by 10% when your overtime expense is $300,000 = $30,000.
Avoiding an IRS penalty of, say, $50,000 by proper classification and tax filing.
Freeing up 200 hours per year of administrative time = time you spend growing revenue instead of firefighting.
Improving employee retention = fewer hiring costs, less productivity loss.
These are the kinds of stats that push you into six‑figure territory. Because you’re not just ‘fixing a leaky bucket’ — you’re re‑designing the bucket to hold more.
Case Snapshot from the Episode
In Episode 32 I asked Rory to walk us through a client case. Here’s a high‑level version:
Business: Service firm, ~40 employees, mixed hourly & salaried.
Issue: Manual payroll, frequent tax corrections, overtime creeping 25%.
Action: Implemented cloud payroll platform, reclassified ~10 contractors, set overtime policy, automated approvals.
Outcome (12 months later): Payroll admin time cut in half; overtime costs down 18%; no tax penalties; realised an estimated $120K in savings and redeployed 15 hours/week into business growth.
That’s the kind of result that motivates me as a host — and I know it will light a fire for you as a business owner.
What You’ll Take Home When You Come To My Studio (Heart of the Hustle Studio)
As a guest on Heart of the Hustle, when you come into the studio you’ll walk away with more than just the interview. You’ll step out with:
A done‑for‑you content toolkit from your interview: social posts, reels, blog snapshot (yes! we create the content based on our conversation).
A refined payroll strategy story: you’ll articulate the power move you’re implementing in your business — in clear, compelling language.
A strategic blueprint you can apply right away: audit, target, tech, data.
Visibility: your story reaches the podcast audience, and it repositions you as the expert in your field.
Networking: being a guest opens new doors—not just for clients, but for partnerships and referrals.
If you’ve ever thought: “I need to talk about what we do differently in our business and why it matters,” then being on Heart of the Hustle is your moment. Want a month of content by just hanging with me for an hour? Be a guest on Heart of the Hustle and you’ll walk out with done‑for‑you social posts based on your interview—and a story that positions you powerfully. Ready?
FAQ (Frequently Asked Questions)
Q: How much can a small business realistically save by improving payroll?
A: It depends on size, current inefficiencies and overtime exposure. But many small businesses save 3‑10% of payroll costs when they optimise systems and compliance. For a $2 M payroll that’s $60k‑$200k. See QuickBooks data: average savings ~4.64%. QuickBooks
Q: Do I need to hire a full‑time payroll expert to implement this?
A: Not necessarily. The key is combining the right tools with defined process and metrics. Many small businesses use a payroll partner + software + clear internal owner. ADP+1
Q: What’s the most common payroll mistake small businesses make?
A: Misclassification of workers, manual error in tax withholdings, and lack of time tracking/overtime management. Gusto+1
Q: When is the right time to upgrade my payroll processes?
A: When you see any of these: payroll admin takes >1 day per pay period; you’ve had a correction or penalty; overtime is escalating; you’re hiring more than 10 people; you don’t have labour‑cost analytics.
Q: Can payroll really become a strategic business lever rather than just an admin function?
A: Absolutely. When you treat payroll as part of your workforce strategy—not just wages—you unlock insights on cost, efficiency, team structure, and growth capacity. That’s the power move.
Let’s Turn Your Story Into Results
If you’re ready to:
Save serious money by getting payroll under control...
Tell your business story in a way that connects and converts...
Have done-for-you reels, captions, blogs, and video content...
...then come hang with me at the Heart of the Hustle Studio. We’ll record your podcast episode, produce your content, and help you get seen and heard without adding 20 more things to your to-do list.
Want a month of content by just hanging with me for an hour? Be a guest on Heart of the Hustle, and you'll walk away with podcast management, done-for-you social, and studio-quality content. Ready to take the mic?
Watch the Full Episode
You can catch the full episode with Rory on YouTube or your favorite podcasting platform. Just search "Heart of the Hustle Episode 32" and get the full strategy breakdown that could save your business six figures.
The Bottom Line
Small‑business owners, listen up: the moment you stop treating payroll as a cost you push through and start treating payroll as a strategic lever you control, is the moment you stop leaving money on the table. The payroll power move we dive into in Episode 32 with Rory isn’t fancy—it’s fundamental. Audit your reality. Set targets. Adopt the right tools. Use payroll data to steer your business. And yes—you can save six figures.
If you’re ready to make that move, I’ve got your back. Let’s make payroll a profit lever for your business—not just a necessary overhead. And if you’re ready to go deeper, come join me at Heart of the Hustle studio and let’s craft your story, build your content, and show the world you mean business.
Thanks for reading. — Sherry Sutton
