Processing client payroll payments

Processing client payroll payments

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I have a payroll client who currently pays the staff by cheque which they hand write from the payroll information I provide.

They are looking to move to paying by internet banking and have asked if I would be willing to set up and then process the payments each month.

I'm a little uncomfortable with the thought of this, but don't want to be unhelpful so would welcome your thoughts..

With a previous client (who banked with Nat West) I could program online payments for them but needed a director/staff member to independently "release" or approve the payments before they were made.  This I was comfortable with.

The client in question this time banks with Lloyds and do not know if they have a similar two-tier authorisation option available.

1. Does anyone know if Lloyds has this option?

2. Does anyone else make payroll payments on behalf of their clients?

3. What kind of wording would I need to add to my engagement letter to cover this?

Thanks

Tracy

Replies (3)

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Euan's picture
By Euan MacLennan
19th Nov 2012 13:49

Telepay

What NatWest calls Autopay, Lloyds calls Telepay.  It operates by submission of forms by fax, which may seem rather old fashioned, but it works well and the banks still provide the service.

The client has to set up the authority on their bank account and to arrange for the passwords (labels that you stick on the fax header form) to be issued to you.  Most payroll software (well! Moneysoft does) will produce the fax input form with the amounts to be paid to each payee (employee code), even if you have to complete the header form and any adjustments, such as setting up new payees (employees), by hand.  We always send the payslips and payroll to the client for (tacit) approval the day before we send the details to the bank by fax.

If you or the client are uncomfortable with you initiating the payments, you could send the input form produced by your payroll software to the client for him to fax, but if the client trusts you to calculate the net pay correctly, he will usually trust you to send off the payment instruction.  The same applies to arranging payment of the PAYE by DD on behalf of the client.

Thanks (1)
Replying to Cheshire:
Red Leader
By Red Leader
19th Nov 2012 14:13

control over client's money

This is something I avoid. You will probably find your institute requires all sorts of additional procedures/controls on your part. It will probably raise your profile with the Practice Assurance people.

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Tom McClelland
By TomMcClelland
20th Nov 2012 10:12

One alternative, help them to do it...

Usually your payroll software can produce the internet banking files for your client's banking software. So you process the payroll and send them the file with the payslips and reports and they submit the file themselves, avoiding rekeying all the net pay figures.

They may have to pay for a banking product upgrade from their bank, but on the other hand they won't have to pay you so much for the pay processing risk.

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