Compliance: A burden for payroll bureaus with charity, LLP, sole trader clients

Working with charities and sole traders can pose a challenge for many smaller bureaus because (with a few exceptions) these entities don’t appear on the Companies House database, which is where payment companies usually conduct automated compliance checks for Know Your Customer (KYC) in order to comply with the Money Laundering Regulations.

At the same time for payment companies, compliance is the toughest aspect of managing payroll payments. The cheapest way to carry out KYC checks is to automate the process by accessing the Companies House database and matching the payment source to a record.

But because they cannot find sole traders and many charities automatically and don’t want to manage these requests manually they often refuse to offer services to unregistered entities and this leaves charities and sole traders (and their bureaus) without any options for payments.

The irony of course is that these organisations, which need the most help can’t actually access it and are left with manual data entry and costly High Street bank fees.

So if the payment companies won’t take payroll payments for organisations they can’t verify then how can a payroll bureau or small accountancy practice access automated payments and cost-effective transfer fees?

Solving this tricky conundrum is Caxton, innovators in the payments industry, who have developed a unique way of managing compliance that is founded on the professionalism of accountancy firms and payroll bureaus and in the partnerships, they create with those business.

The starting point is to see individual customers and their firms and bureaus as individuals. Admittedly, this means that Caxton has to put more effort into the relationship-building aspect of the business but working to understand how a customer operates pays dividends.

Despite legislation, MLR, and KYC protocol, money laundering remains the biggest single concern for both the regulator and regulated financial services business. As a participant, Caxton upholds the highest standards of compliance and regulation.

Part of the relationship built with bureaus and accounting firms is to understand what KYC checks are already in place when a customer is onboarded at the firm – and how often they are validated.  

It’s always a good sign when the bureau is up to date with their own compliance responsibilities Caxton can take that as a first sign that the firms’ customers are indeed bonafide.

Naturally, this means that Caxton has to work hard on the compliance angle with the bureau as they have to be sure that they are in turn carrying out effective checks on customers and money movements.

But at the same time, this relationship building means that the price of transactions can be brought down when the bureau or firm puts all of their payments through the Caxton interface.

Some payment companies have perhaps moved too far away from customer service and indeed ‘knowing their customers’ which is a move that Caxton hopes to reverse.

Ready to give your clients a better service?

Caxton offers software as a financial service that means you can make any payment, from one platform. Using Faster Payments through Caxton, you can offer your clients a way to schedule and make all sorts of payments including payroll and supplier payments. 

The interface is simple to learn and easy to use – and a Faster Payment is almost instant, giving you and your clients more time each month to prepare their pay runs.

Book a no-obligation demonstration and see how you can add this service to your firm. 

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• 6 Secrets the sales team won’t tell you about new finance software
• How to fix and prevent BACS file issues for payroll

If you’re looking for more information on finance and accounting then check the Caxton Accounting Professionals Hub.