Payformance

Web site: www.payformance.com

Despite the gallant efforts of environmentalists, the vast majority of today’s business transactions still involve paper, partly because of an absence of standards for receiving and transmitting data, files and invoices. While some niche markets have good penetration between wholesalers and resellers with decent electronic invoicing standards, paper is still prevalent.

But there’s a company that can shred that trend. Its name is Payformance Corp., and whether it's payroll, accounts-payable or accounts-receivable services, Payformance’s heritage of installing and facilitating thousands of systems for nearly two decades makes it a self-described “electronic service bureau.”

Founded in 1984, Payformance says it is the first company to combine hardware and software for a turnkey solution to securely print MICR-encoded payments.

Payformance's 80 paper-conscious employees serve more than 3,000 customers globally, including more than a hundred Fortune 500 companies (IBM, AT&T, Coca-Cola and Merrill Lynch, to name a few). Payformance enables organizations to easily adopt new payment technology that fits existing accounting systems.

Not stuck in any one industry, Payformance is a broad, horizontal solution that helps CFOs, payable/receivable managers, accounting clerks and payroll administrators benefit from the value of electronic payment and billing via its Web-based services. Everyone needs to write checks to employees, pay bills and send out invoices. Payformance makes it cost effective by reducing labor, time, operational risks and the headaches that accompany these financial transactions.

The technology envisioned and created by Payformance enables companies to smoothly migrate highly inefficient "paper factories" toward electronic payment fulfillment. Considered by many to be the pioneer of desktop-based laser payment printing software, Payformance has a product line that includes:

-- Secure32 for local payments printing. -- Secure ACH for electronic payments. -- Payformance Outsourcing, which eliminates in-house corporate paper. -- PayBOND, the newest addition to Payformance's suite of products. PayBOND is a complete and secure software solution designed to minimize corporate check fraud at the point of first presentment. Payformance’s patented barcode embedment authentication technology offers electronic protection of checks and other negotiable documents with PayBOND.

Payformance’s offerings are targeted to financial officers/managers of small, midsize and large businesses, ISOs included. These proprietary products and services enhance the ability to create payroll, payables and receivables that involve printing and mailing of paper documents as well as electronic payments. Payformance efficiently automates these processes.

“Instead of scurrying around when it comes time to do payroll or pay bills or send invoices, printing up checks, putting on postage or packing paper into FedEx packs, they click a mouse, hit our software and we turn the data we receive into actual paper checks and invoices,” says Billy Meadow, Chairman/Founder of Payformance. “Companies no longer are running the paper factory – we are.”

Payformance offers three payroll options. Companies can:

-- Print the checks locally using Payformance software. -- Utilize Payformance’s service bureau over a wide area network through the Internet, sending data to Payformance, which, in turn, sends out their checks. -- Totally eliminate paper. The customer sends Payformance a deposit file directly, and it is transformed into a payroll e-mail. Payformance provides a Web page at the service bureau Web site, where employees get an automated pay stub. Companies log on via passwords to a secure page that displays their private payroll records. Any system is adaptable.

“Legacy systems don’t need to get rid of the beast, just the headaches of the beast,” Meadow says. “We can tie into anybody’s systems.”

Payformance sees the big picture as seamlessly moving data from one system to another, and it has successfully interfaced to virtually every major accounting system as well as numerous legacy systems. Installation and operation is completed in less than a month for most customers, and the average turnaround time is about eight days for these key, value-added services.

“We can do it quicker, but why be in a hurry?” Meadow says. “We do make payroll managers look good.”

On the invoicing side, Payformance guarantees that all data received will be mailed in an efficient and timely manner. With no minimum requirements, data can be transmitted daily as opposed to weekly or semimonthly.

Invoices are generated via an automated upload process. Payformance’s software immediately picks it up when it hits and initials the print job instantaneously. This translates into a clean and simple daily process as opposed to time-consuming procedures that tie up staff for days. Who wouldn’t want to improve their cash flow with this automated, time-efficient billing process?

As always with the creation of money, procedures must be approved. Every customer has his or her own secure password. One employee can submit a file and another employee of the same company can approve the payment using the correct passwords.

It’s all built in to meet each customer’s special needs, which might involve consolidation of payroll for two or three or even four divisions of a company that, through acquisition or merger, has different accounting systems. The payroll manager can run the different divisions through a unified service bureau, compliments of Payformance.

“Everyone uploads to one Web site, downloads data and we take it from there,” says Meadow. “The payroll managers are relieved of headaches, staffing issues, labor, supplies, even maintenance agreements on equipment. We handle it all with a click of a mouse, and all data goes into our automation system."

That system, incorporating high-speed equipment from Xerox and Pitney Bowes, is part of a well-managed network at the company's real-time redundant production facilities in Atlanta and at its headquarters in Jacksonville, Fla.

As soon as Payformance receives a payroll file, it sends back an e-mail message verifying receipt and data, replicated simultaneously at both sites. Virtually all Payformance technology is in-house. Even though the bulk of Payformance's work is integrated technology and management, customers can and do use their own brand with that technology. By utilizing Payformance’s service-bureau model, employees log into their own company’s “branded” Web site, which actually is a Web page processed through Payformance’s service bureau.

Meadow predicts that at least half of the customers who use only Payformance software and opt not to use the full service bureau processes will migrate to the service bureau over the next year or two, largely because of the efficiency and cost savings it offers. Competitors, beware.

“ADP is our big competitor on the payroll side, but not huge since we are quite strong technologically," Meadow says. "Theirs is a Model T offer; we’re flexible. ADP does a fantastic job, but unless you do it a specific way with their application, that’s all you get.”

According to Payformance, the rest of the market has accounting systems and software features not offered by ADP. There is still the paper pain of getting it out the door. That’s where Payformance comes in. Its bigger picture depicts one-third payroll, one-third payables – any form of disbursement to vendor – and one-third invoicing and statement printing, all handled via the Payformance service bureau Web site.

Payformance envisions a blending of the world of paper payments to electronic card payments and hopes payroll debit cards will become part and parcel of this brave new world. Yes, it will require financial managers, payroll clerks and bookkeepers to utilize the Internet for such a flexible payment solution, but Payformance sees a big opportunity on the card side for payroll.

Payformance also offers disaster recovery service. Customers can recover data in-house with Payformance software, send it to Payformance over WAN or keep it in-house and just use Payformance as a backup. The disaster recovery service involves Payformance running a complete cycle – a test service – before agreeing to be authorized as agent for the prospective customer.

Once in place, Payformance runs a live test once a year. The customer pays for the test and is billed for a service fee.

Typically, set-up fees on larger clients for Payformance payroll and payables products and services are around $1,000. This involves the mapping of existing legacy data files that are charged on a per-item basis. The fee decreases as volume of job increases. The per-item fee ranges from 50 to 60 cents but sometimes can be as low as 40 cents – far cheaper than it will cost in-house, according to Payformance calculations.

How many checks or invoices need to be processed? The minimum is one.

“We have customers that send us 10 items or 100 or 1,000 or even 10,000,” says Meadow. “We are all of the above.”

Payformance has all the necessary integration for reporting as well. Customers can find out the status of any order or the aggregate of any service at anytime online. Payformance customer support service is fully automated in terms of all data and all processes, presenting it back to the customer via the Web. All requests are put online for real-time viewing and tracking.

Payformance channel partners who remarket this technology can have their sales force check in at the Web site just as conveniently. While Payformance does have a small in-house sales force, it’s actively looking to add channel partners. Payformance has nine partners that add its technology under their brand name, i.e., banks and various vertical-market niche partners focused on real estate, health care and retail.

“We look to companies that are into transactional type of revenue for partnering,” says Meadow.

Channel partners generate all sales efforts and send Payformance the data files for processing. Payformance has annual agreements based on volume with its partners. Resellers can take advantage of a large margin, according to Meadow.

“Typically, our channel partners will make $.10 gross margin per transaction,” says Meadow. “And we are happy to do business with anyone – we are efficient with small partners as well as larger ones.”

With its due diligence coming to fruition and its partners eager to offer the services that it has perfected over the last year, Payformance is in a growth mode. Resellers and numbers-crunchers who want to save money and a few trees should visit www.payformance.com or phone Neal Anderson, President, at 800-733-0908.