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can cause significant delays to payroll runs and leave employees with missing or delayed salary payments. From a reputational standpoint, it’s crucial for payroll providers and their clients that employees are paid on time and in full regardless of payment issues that occur. A proactive approach is therefore required to ensure errors leading to payment failures are minimised or scenarios where they could occur are identified as early as possible. This may include using key validation processes to ensure the correct utilisation of the necessary bank details and formatting depending on the specific currency and destination before payments are made. There’s always a risk of payment errors or issues occurring, especially for payroll providers managing multiple global clients. Providers may find themselves making tens or hundreds of thousands of monthly payments in different currencies to different countries, making the occasional issue likely. Managing payment issues can be split into two categories, minimising the chance of failures occurring and reacting to errors that occur.
Data entry challenges The most common reason for failed payments is incorrect payee details. Manual data entry made by a payroll provider, the employees, or employee themselves all represent a risk of incorrect details being gathered. While payroll runs usually result in the same group of employees being paid to the same account on a monthly basis, changes such as account closures or payee name changes can result in unexpected payment failures. Incorrect digits in IBAN numbers, account numbers, and differences in names on accounts compared to legal or known names can be issues that are difficult to identify quickly but may be the reason for payment failures. For example, a payroll provider could issue an EUR payment on behalf of their client to a staff member in Spain. The funds bounce back to the client’s account with the reason INVALID CREDIT ACCOUNT. In this scenario, the employee has mixed up digits within the account number making it invalid. The correct bank details need to then be confirmed and verified with the employee and the necessary changes made before the payment is resent,
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GLOBAL PAYROLL MAGAZINE ISSUE 8
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