An irregular payment indicator is a signal that spots any payment that’s considered unusual — i.e. not falling in within the usual payroll process.
Irregular payments can be caused by all sort of factors, including
- Human error (whether in approval process or data entry)
- Changes in payments patterns e.g. one-time payment like a bonus
- Payment processing delays
- Fraudulent activity
- Changes in tax laws and regulations
Irregular payments indicators mitigate the risk of any problems that can arrive as a result of these payments.
How do irregular payments indicators work?
Irregular payments indicators involve the analysis of payment patterns – including things like dates and payments amounts – and spotting anything that falls out of the norm.
Once a payment is flagged as irregular, it’s brought to the attention of the company and the company can investigate the payment, as well as take steps to prevent any similar occurrences.
Using irregular payments indicators for a global workforce
For companies that employ worldwide, irregular payments indicators play a crucial role in detecting fraud, identifying errors, and smoothly managing cashflow while spotting areas for improvement.
While relying on banks to detect irregular payments is possible, it can prove to be more challenging for companies managing a global workforce. Banks may not have the knowledge or insight into different countries’ regulations and systems to be able to detect irregular payments on a global scale. Other factors, like currency conversion, can add even more complexity.
Using a payments distribution platform instead of a bank is one way companies with global operations are getting past this challenge. Using a platform with expertise in multiple regulatory ecosystems means more visibility into payment irregularities and the potential risks that come with them.