How we pay, and the speed in which we do it, has changed drastically in the last decade. The advent of peer-to-peer, mobile payments and real-time electronic payment systems like Faster Payments, have transformed consumers’ and businesses’ expectations of how quick and easy it should be to get paid.
Payments now happen in minutes and seconds, not days, which has a huge impact on businesses’ working capital and borrowers’ ability to fund emergency or aspirational purchases.
Ultimately, everyone wants certainty that money will be in their account when they need it, not when it suits the processing cycles of banks or payment system providers.
But payroll is one segment of the market that has not fully reaped the benefits of the shift towards faster, more reliable payments. Payment technology may have come on leaps and bounds, but the payment part of payroll is still highly manual and has changed relatively little in decades.
An online survey of more than 90 payroll professionals from payroll bureaus and private and public-sector companies conducted by Modulr, found that approximately 40% of companies still used Excel spreadsheets to manage payroll. Most of the companies that relied on Excel were in the private and public sectors.
Excel spreadsheets are used for inputting and outputting data from payroll software systems, and for uploading payment files to bank portals and electronic payment systems like Bacs.
Despite the advent of real-time payment systems like Faster Payments, most payroll managers (approx. 90%) still use systems like Bacs, which operates a three-day settlement cycle for paying salaries.
While Bacs offers attractive pricing per transaction for payroll managers managing high volumes of payments, the process is time consuming and potentially error prone. Payroll managers must create and export batch payment files from their payroll software. The files need to be authorised and then manually uploaded to a bank portal or Bacs-approved bureau.
This clunky, highly manual error-prone process sharply contrasts with how payments are made in the rest of the economy — always-on 24x7 payments at the click of a button — and is unlikely to meet the expectations of a changing workforce made up of a growing number of temporary and casual workers that need to be paid weekly or daily, and not monthly.
If payments are held up due to slow, costly and unnecessary manual processes, temporary workers or contractors may not get paid on time, which causes unnecessary stress and extra workload for all parties concerned.
But what if there was a new, faster, more secure, transparent and automated way to process payroll that did not require batch files or unnecessary manual processes and that was tightly integrated with the software that payroll managers use day in, day out to perform complex tax and salary calculations and prepare payroll files?
Modulr’s Application Programming Interface (API) can be easily integrated with existing HR, accounting, payroll and CRM software applications. Automated payment functionality is now within every businesses’ and payroll managers’ grasp. Making a payment is no longer something payroll managers need to think about; it just happens.
No more manual exporting and uploading of CSV files to bank portals or manually checking bank accounts to ensure funds are received in time to pay contractors, which is onerous and time consuming, particularly if you’re a payroll manager having to manage hundreds, if not thousands of payroll payments regularly.
“With Modulr in place, it has changed the steps our support teams need to perform,” says Charlotte Rea from Task UK, a customer service outsourcing company that manages payroll for umbrella companies who employ contractors. “Previously, it was quite a manual process. We had to log onto different bank portals for each of the companies we work with. That took up a lot of time. Now it’s just a matter of clicking the payment transfer button from within our CRM software.”
With fewer manual processes to manage, less time is spent trying to ensure all the information needed to pay contractors on time is correct. “The main thing for us is simplifying the process that we follow,” adds Rea, “which allows us to differentiate our proposition. We’re always looking for ways we can make processes simpler and for people to be more effective in their roles.”
If you’re a payroll manager looking for a new, faster, more streamlined and efficient way to pay, then get in touch.
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