The U.S. Job Openings and Labor Turnover report shows that 4.2 million Americans quit their jobs in June 2022. A few companies are conducting mass layoff exercises as cost-cutting programs. In contrast, others have a problem retaining great talent. Organizations that fall into the latter cannot afford to be lenient with their payroll management programs. They must either have a solid internal payroll management team or partner with a reliable third-party payroll management company. Such partnerships help an organization in the following ways:
- Protects them from liability for paying temporary/contract hires
- Saves time and money on administrative costs
- Reduces the burden of maintaining payroll compliance and tax withholdings.
The top payroll management companies often manage payrolls for hundreds of thousands of employees across large enterprise customers. These companies cannot compromise on their compliance or security standards. If you run one such payroll management company, follow these tips to improve your security and payroll management processes.
Payroll Security and Management Tips for Payroll Management Companies
Integrate with a Reliable Payment Processor
Most organizations rely on the ACH network to pay their employees with its direct deposit feature. Payment processors with reliable ACH technologies help these organizations set up recurring payments for their clients on a weekly/monthly schedule. These payment processors also bring technologies like SMS payments and email invoicing to automatically generate invoices for vendors and stay in touch with employees through text messages.
Adopt Multiple Payment Methods
Payroll management companies should ideally adopt multiple payment methods to accept payments from their clients. Adopting payment solutions like ACH and credit/debit cards is a must.
Leverage Tokenization
Tokenization helps payroll management companies securely store payment and employee bank account information. Most tech-savvy payment processors help payroll management clients adopt the best risk management practices and cybersecurity frameworks with tokenization. Learn how data tokenization and encryption help organizations minimize cyber-attacks and data breaches.
Define Data-Sharing Practices
Payroll management companies should practice safe data-sharing practices with their clients. Here are a few best practices to follow:
- Never share sensitive passwords over emails
- Always use encrypted email servers to communicate sensitive account information with stakeholders
- Use biometric authentication for bank transactions at the payroll-manager level
- Develop a cybersecurity plan for mobile devices
Limit Access to Customer and Payment Data
Limiting access to sensitive payroll and bank account information is the best way for an organization to prevent potential data leaks. Ideally, only a limited number of individuals at the payroll management company should have access to payroll software and final authorization tasks.
Create a Fail-Safe Plan
Fail-safe technologies can help payroll management organizations recover lost data quickly in the event of a security breach or human error. These companies should prepare for the worst-case scenarios and create backups for all payroll data in a safe encrypted location.
Perform Periodic Security Maintenance
Periodic security maintenance of the payroll processing systems helps the company identify potential loopholes early on. They should ideally partner with a cybersecurity firm or ethical hackers who can test the safety of their systems with ethical brute force and DDOs attacks.
Scale with a Plan
Payroll managers should partner with payment processors that offer multiple innovative, scalable payment technologies that fall under the protection of the same cybersecurity measures. Such partnerships help them scale rapidly without spending additional time and human resources on enterprise risk management and comprehensive cybersecurity testing.
Create Quick-View Reporting Structures
Quick-view reporting and dashboards help payroll managers keep tabs on their processes in a single window. A comprehensive dashboard monitors various aspects of the payment processes and flags discrepancies quickly. Such quick-view extensive dashboards help them take necessary measures to streamline and process payments via alternate methods in case of a payment method failure.
Stay Updated with Payroll Tax Policies
Staying up to date with the latest payroll tax policies helps the company stay compliant while processing payroll on behalf of its customers. Most nested third-party payroll processors need to have individual contracts with the payment processor, ODFI, and the client organization. Learn more about nested-third party senders and service providers.
Create a Transparent Pricing Structure
Transparent pricing structures help payroll management companies establish strong relationships with their clients. The three primary components of such structures include:
- Price of managing payroll per employee
- Payment processing costs for various card networks, online payments, and issuing banks
- Tax assistance costs
- Per check envelop stuffing costs (if any)
Make a Digital Trail of Transactions for Follow-Ups
A digital trail of transactions helps the company manage financial disputes and identify hidden costs. They also help with reporting and dashboard creation for their clients.
Benefits of Partnering with a Payment Gateway Provider like iCG
Partnering with a reliable payments processor like iCG should be on the top of your cybersecurity and management lists. Here are some of the key benefits of partnering with us.
- Safe Storage of Account Information: iCG leverages the best cybersecurity measures to ensure that your clients’ employees’ payment data is in safe hands.
- Centralized Secure Platform: Our secure, centralized platform helps you manage and process payments using various payment methods on a single platform.
- Low-Cost Processing with Direct Deposits: Our ACH processing technology helps you with deposit transfers to save costs on processing fees. This results in massive savings for payroll management companies that often process payrolls for thousands of employees every month.
- Prevention of Check Fraud: Processing payments via online direct deposit on the ACH network with us helps you minimize check fraud.
- Integration with Back-Office Accounting Software: We support developer plugins to connect our payment processing unit with your back-office accounting tools like QuickBooks for a two-way sync. This helps you create a digital trail of transactions with a two-way data sync.
- PCI-Compliance: We uphold the highest levels of PCI-DSS and Nacha compliance to reduce your PCI scope.
- Effective Tracking via Virtual Terminals: Our intuitive virtual terminal solution helps you track and manage payroll online for thousands of employees on the go.
- Faster Payment Transfers: Our ACH direct deposit payroll solutions help you reconcile your accounts within hours, not days or weeks.
- Additional Technologies: We also have an extensive catalog of innovative payment solutions you can leverage for internal and external payment processing on the vendor fronts.
iCG simplifies payment processing for payroll management companies of all sizes. Our innovative payment solutions are heralded as next-gen technologies that streamline recurring payroll operations for automated transfers. We also uphold the latest Nacha-compliant security standards to help with direct deposit transfers. Request a callback from our relationship managers to partner with us today.