From tradespeople to coders to office workers, good employees are hard to find. With the U.S. jobless rate maintaining record lows, keeping them can be just as challenging.
This leaves staffing companies extra busy juggling contracts, recruiting workers and managing turnover for job assignments of varying lengths. Every day is payday for a staffing firm and while that might sound like something to celebrate, it’s actually a pretty complicated thing to manage, particularly when workers need to be paid before the staffing agency has been paid by the companies that use them.
“Staffing agencies need something that’s seamless. Banks are not really built to pay employees. They’re meant for getting payments, for payment processing, accounts receivable, accounts payable, depositing checks. We’re really good at paying people.”
–David Taub, Cachet Director of Sales
When staffing agencies go looking for third-party solutions, they come with a list of needs that doesn’t look like those of other companies. And sometimes they come with a list of other providers already crossed off.
Square Peg, Round Hole: Solutions Hard to Come by For Staffing Company
When a decade-old staffing company was dropped by its payroll provider recently, the CFO went to a bank for answers. Weeks later and deep into paperwork, the CFO still didn’t know whether the bank would handle the payroll. Week after week, the CFO had to get on the phone with his payroll provider and plead with them to run the payroll a little longer. Week after week he tried to get answers from the slow-moving bank.
In frustration, he did an internet search and came across Cachet Financial Services and shared his frustrations with us. We get it. At Cachet, we’re part of a family of companies that specializes in providing solutions to companies who need to get people paid, securely, on time and without a lot of burdensome processes. That is not an easy thing to come by in the staffing industry. Because paychecks often go out before a client has paid the bill, It’s a business model that makes some banks treat staffing company payroll like an exercise in underwriting.
Why Banks Aren’t the Best Fit for Staffing Companies' Payroll
Many staffing companies don’t realize that they have options outside of banks for ACH direct deposit payroll services. While banks may charge more for ACH processing, they typically do less, for a variety of reasons:
- Banks don’t specialize in understanding the payroll industry.
- Banks don’t use processes tailored for payroll and may not track multiple FEIN files in a way that allows them to trace the source of an NSF.
- Banks see staffing companies as high-risk. As such, they often make staffing companies jump through additional hoops for ACH direct deposit payroll services, like the CFO in our example above.
- Some banks take extra precautions to minimize risk with staffing agencies like requiring dollar for dollar reserve, yearly audits and long underwriting windows.
Cachet’s Services: First Rate Customer Service and Deep Expertise
Cachet has deep expertise in ACH direct deposit payroll. In fact, ACH is not only Cachet’s specialty, but it is our entire focus. Here are a few of the reasons staffing companies can find a better fit using an ACH direct deposit specialist:
- Drawdown / reverse wire services, so funds are in place in advance to cover the payroll. This eliminates the NSF risk.
- Same-Day ACH direct deposit, which staffing companies often need to process last paychecks in a high-turnover environment
- Daily reconciliation down to the client level
- Payment options that include pay card ACH deposits —an option well-suited for paying short-term hires.
- Payment options that include an OBC (Official Bank Check) account for paper checks under a secure system that shields account details to reduce the risk of fraud.
- Double-entry accounting system for ACH and OBC accounts, providing visibility into both sides of the equation: payroll tax accounting is matched to the payroll deposit accounting
- Expertise in multistate payroll taxes
- An easy-to-use, state-of-the-art platform flexible enough to get payroll funds wherever they need to go, including garnishments, 401k payments and other third-party payments
- Risk mitigating security features, including a $50 million crime bond
- Better pricing. Our costs are typically at least 10% cheaper than banks
- Quantum options: Maximum risk mitigation products that allow you to use a Cachet account to settle funds.
- A commitment to clients that goes way beyond the same old menu of services.
David Taub, Cachet’s Director of Sales, says staffing agencies have enough to worry about without the stress associated with risky or burdensome payroll processing.
“Staffing agencies need something that’s seamless,” Taub says. “Banks are not really built to pay employees. They’re meant for getting payments, for payment processing, accounts receivable, accounts payable, depositing checks. We’re really good at paying people.”
What Clients Say about Our ACH Direct Deposit Payroll Service
“They’re on top of things,” says Jim Belanger, owner of Local Economy, a payroll provider just outside of Portland, Oregon.
Four years ago, when Belanger was looking for a third-party company to process ACH direct deposits because he had reached his limit at his bank, he found what he was looking for in Cachet.
“It was a much different approach, a friendlier approach,” said Belanger.
Leave ACH Direct Deposit to the Specialists
While there’s never a good time to be stuck with a clunky and unreliable process for managing ACH direct deposit payroll – or paying more than you should for clunky and unreliable service – it’s inefficiency with the potential to compound itself in a tight job market.
At Cachet, we’re committed to service that does more than save our clients’ money; we provide service that gives them back time. That’s time our staffing agency clients can spend finding and hiring the people they need.
Our clients have the added advantage of additional solutions provided by our sister companies, Payroll Tax Management, SBS Payroll and Time Rack. Give us a call or click on the link below to learn more about Cachet solutions for the staffing industry.