Payroll Nightmare

[Hattiescoffee]

I own a coffee shop with about 22 employees on payroll.  We posted our direct deposit payroll two hours late this past pay period, so I called Square the next morning (2/20/25) and asked them what my options were for being able to pay my employees on time (Friday 2//21/25). 

The man I was speaking to informed me I could cancel the payroll and rerun it with manual checks. 

He walked me through how to do it and I confirmed over and over that I would be able to still pay my employees on time- that that was my biggest concern.  He said yes just write them the checks-  HOWEVER it was not communicated to me that even though payroll was cancelled and rerun with the manual check option that the funds would still be removed from my checking account and have to be transferred back which can take up to 2-3 business days.  Had I known I needed to have enough cash to cover payroll twice I never would have taken the time to do this.  

Thinking the direct deposit was cancelled and that the funds would not be removed therefore- I wrote out all the checks, communicated to staff, and arranged for them to pick them up- even asking them to deposit their checks asap so the funds weren't left in the bank. 

Friday morning I woke up and checked our bank & payroll had also been taken out as well. 

We do not have a ton of cash in the bank as most small businesses can relate to.  So when my payroll is $6000+ and it gets removed twice that's a pretty big deal for my operations.  

I have spent the past 3 days calling Square multiple times seeking to speak with a supervisor or SOMEONE in charge with the ability to put that money back in my account and have not been able to get ahold of anyone.  I have called over 10 times. 

Friday I asked them multiple times to send back the funds & they are saying it takes 2-3 business days.  They told me Friday I would hear from a supervisor in payroll by noon or first thing the following day.  When I called back on Saturday they said no supervisors are in on the weekend.

I am so disappointed in the customer service.  Not only for not informing me about the gap period I'd have to experience with payroll but also for what's happened after that in not being able to reach anyone with any kind of authority to make it right.  

Has anyone else dealt with anything like this and how do you get ahold of someone in an emergency? 

[Donnie-M]

@Hattiescoffee You have your hands full, and I am sure right now this is taking you away from what you love about business.

I haven't dealt with Square payroll directly, but I did a goof one time and just pulled my payroll data from the wrong week.  So I shorted some employees and overpaid others.  The thing about direct deposits, once they are initiated, they are impossible to stop.  Looking at your time line, it looks like that was the case for you, once you initiated it on Wednesday late, it was really too late to stop the ball rolling.  I am not sure how the cancel payroll feature works, but it sounds like you got caught up in the place where the computers took over and it takes time to reverse.

Immediately, I would talk to your bank and see what they can do, could they do a short term loan to cover your payroll.  I think the most important thing is to communicate with your team.  (Also, another thing I learned in life is that nothing travels faster than a bad check).

Ultimately, I think it goes without saying that you didn't mean to do payroll late.  I think you would have been better off to just let your employees know it would be late.  You would be surprised how understanding they can be.

Another bit of advice that doesn't help you right now, but this is what kills small businesses.  Being undercapitalized can absolutely wreck your company.  I know it is tough to retain some earnings/savings.  But you have to do it or your one disaster away from being out of business.

The other short term solutions might be to do an instant transfer, but if you can scrape cash fast, you can get through this.  I don't think the payroll team meant to help you, but I know right now, it doesn't feel that way at all.  I wish you the best and sorry I can't be of more help here except to say, I have messed up too.