Paying your staff without errors may not seem like a big deal. It should work, right? But what happens when it doesn’t? Even the smallest mistake, especially if not picked up immediately, could end up compromising payment security and costing your business thousands.
The positioning of decimal places may not be something you’ve ever really spent a lot of time thinking about before. But the decimal place could be the difference between under paying or over paying your employees, potentially by a lot of money.
This blunder can be made and submitted in seconds, perhaps a mistake from a tired or rushed employee? And if you don’t have the correct software protections in place, you’re in big trouble.
Taking a chance
With more than 2 billion online transactions made every year, mistakes are inevitable. That doesn’t mean you can’t take a few easy steps to avoid costly mistakes.
In 2017, a payment file blunder led to an Irish teenager receiving over 100 times more than he was expecting via bank transfer – nearly €20k for two days work, instead of the €196.36 he’d actually earned.
Unfortunately, he did what many 19-year olds would. He spent the lot in 3 weeks. His bad decisions ultimately landed him in prison, but according to the FCA’s official advice, that may not always be the case.
“Where we are satisfied that the consumer had in all honesty not realised that the money was not intended for them, we will generally look to see what they did with the money before the mistake was noticed.
We will normally uphold complaints like this only where the consumer’s position changed in such a way that it would be unfair for them now to have to pay back some or all of the money. To decide whether this has happened, we are likely to need to ask the consumer for details about their wider financial situation – so that we can fairly assess the impact on them of what has happened.”
With this statement, the FCA has made it clear they will not just refund money automatically to a business that has made a payment mistake. It only applies in straightforward cases, where the recipient agrees to have the funds debited from their account. And many may not.
Basically, as a business, you need to be prepared to accept that if you overpay a staff member due to your own decimal place mistake – you’re not guaranteed to get the funds back.
What can I do to prevent this?
Obviously, no one wants to pay money that an employee hasn’t earned – but there is another way. And it’s by implementing a tool like SecureFlow.
Ensuring that the correct payment security measures are in place is vital to the success of any business. Using a tool that alerts you in real-time to any transactional irregularities, and allows you to create approval workflows that follow best practice, could be the difference between losing money through costly errors.
If you’re concerned about your own payment processes or payroll security, get in touch to find out how the AccessPay platform can flag invalid or unusual submissions before they ever leave your bank account.