Accentra ensures contractors get paid more quickly and easily by integrating Modulr's flexible payment service within the software that umbrella companies, employers and payroll bureaus use every day.
Joachim Victor is managing director UK at Accentra, and has more than a decade's experience designing and developing payroll and financial software solutions for the employment services sector.
THE CHALLENGE
Most of us are paid monthly by our employer, but the UK’s almost two million contractors rely on third-party providers like recruitment agencies, payroll bureaus and umbrella companies to get paid. Ensuring contractors get paid on time presents its own set of challenges for these companies, says Joachim.
In our consumer lives, we can make a payment in a matter of seconds using a mobile app on our smartphone. But in the world of payroll, Joachim says the ability to pay someone is typically not integrated within the software or applications these companies use every day.
What tends to happen, he says, is that payment files are exported from one software system, then manually uploaded to a banking portal or payment system, where they then need to be authorised before the money is paid to the contractor. These manual steps in the process add unnecessary time, costs and risk.
Umbrella companies and payroll bureaus also rely on recruitment agencies or companies whose payroll they manage sending them money on time to pay contractors. However, currently, they have little or no visibility over when these funds are received. “Usually the payroll manager won’t have access to the bank account, so they're relying on someone to download that information and tell them the agency has sent the payment,” Joachim explains.
How and when contractors are paid is also closely tied to traditional payment providers’ hours of operation, which are typically normal working hours and not weekends, which gives bureaus and umbrella companies little flexibility if they need to pay someone urgently. If they fail to meet a provider’s payment cut-off times and need to use faster methods of payment, they can end up incurring additional costs.
Varun Monteiro, Head of Operations at Accentra says more than 90% of its software customers still use batch-based payment schemes like Bacs to pay contractors. Bacs can be cost effective, but it operates a three-day settlement cycle, so payment files need to be finalised by a Wednesday if contractors are to be paid by a Friday, which gives payroll managers little room for error if something goes wrong.
Manual processes, a lack of flexibility and transparency, all add up to a stressful working week for umbrella companies and payroll bureaus that typically manage payments on behalf of hundreds of contractors.
THE SOLUTION
Using Modulr’s payments-as-a-service Application Programming Interface (APl), Accentra was able to integrate new, highly automated and more flexible payment services within its Primo software range for standard employers, umbrella companies and payroll bureaus.
Modulr’s API allows Accentra and its team to quickly and easily create digital payment accounts for customers of its Primo software solutions. Paying contractors is now as simple as pressing a button from within their software.
No more logging in to different bank accounts and having to manually upload payment files to banking portals or transferring payment files via email, which is likely to be deemed insecure under the EU’s General Data Protection Regulation. Communication between Accentra's payroll software and Modulr's API is encrypted, which provides a much higher level of security.
Accentra also wanted to give users of its software the ability to make payments whenever they wanted, even on weekends. Using Modulr’s digital payment accounts, umbrella companies and payroll bureaus can now make payments 24/7, 365 days of the year. “Usually, umbrella companies are rushing to meet banks' cut-off times for payments,” says Varun. “If they cross that line, it becomes more expensive. With Modulr, they can make payments any time, even on weekends or bank holidays.”
Instead of having to rely on payment schemes like Bacs, which operates a three-day settlement cycle, Modulr’s digital payment accounts connect to Faster Payments, which means contractors can be paid instantly. “The payment goes through in minutes and umbrella companies, employers and payroll bureaus know precisely when the money hits the beneficiary’s account,” says Joachim.
THE BENEFITS
“Using Modulr is much more cost-effective for companies,” says Varun. He estimates that one of its umbrella company customers has saved approximately 86% on the cost of instant payments via Modulr’s API, when compared with more traditional payment providers.
Clients are also notified when incoming payments hit their account for paying contractors. Once the umbrella company or bureau has confirmed a payment, a transaction ID reference is automatically transmitted to the payroll system. No more having to manually check bank accounts to see if the funds have arrived. “The transparency and visibility Modulr's system provides means umbrella companies or bureaus can pay out before the funds have even cleared,” says Joachim. “As long as the recruitment agency has paid, Thursday won’t be a stressful day for payroll managers anymore.”
A process that once took a couple of hours or a day for umbrella companies and bureaus, depending on how many contractors needed to be paid, is now reduced to seconds, thanks to Accentra’s integration with Modulr’s digital payment accounts. “We used to pay contractors by logging onto a banking application and entering the payment details for each contractor manually,” says Nikolaos Sakkas of NSP Contractors, one of Accentra's umbrella customers. That process took us one-and-a half-to-two hours to pay 50 contractors every week. Now it takes no more than 30/40 seconds to pay all 50 contractors.”
The working week just got a whole lot better for umbrella companies, payroll bureaus and employers, who can now spend less time manually processing and checking payments, and more time providing more strategic, value-added services to their customers.
“With Modulr’s API and 24/7 functionality, umbrella companies and payroll bureaus now have the luxury of waiting till Friday to receive payment from agencies to pay contractors. In traditional banking there was a constant rush to either push the agencies for payments and get contractor payments done in time before the bank closes. Modulr has made it easier to deal with any delays in payments received from agencies or timesheets directly from contractors.”
- Varun Monteiro - Head of Operations - Accentra
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