Lab at Home's 30% Savings and Shorter Prep Time for Salary Disbursements through NextPay

October 4, 2021
by
Proven

Company

Lab@Home is a health services company in the medical testing industry.

They provide easy and convenient medical laboratory testing from the comfort of your home without needing to head out to clinics or hospitals.

Background

You can visit their Facebook page Lab at Home PH

“We first started as a Facebook page wanting to connect people who needed to get their medical tests done in laboratories, at the comfort of their own homes.

Lab@Home started in the middle of a pandemic. With waves of the Covid-19 virus wreaking chaos across the globe, Lab@Home saw the need to provide medical tests to individuals in a safe space - their homes. Toshi, the operations manager of Lab@Home, shared about their journey.

“We first started as a Facebook page wanting to connect people who needed to get their medical tests done in laboratories, at the comfort of their own homes. There were no charges, and it was all gratis because we only wanted to do it as a pet project. The takeup rate was great, and that’s when the founder made it a business.”

With that, Lab@Home hired Toshi to establish the business structure and polish up operational standards. As an experienced operator, setting up the financial system is at the top of his to-do list.


Problem

The first hurdle - banking registration

Setting up financial operations turned out to be one of the biggest headaches Toshi faced. 

To get everything set up quickly, he wants to avoid the lengthy approval process from a traditional corporate account. He also foresees disbursement issues given Lab@home has multiple touchpoints with partners and staffing.

“If we were to start collecting payment, I would either have to use my personal banking or GCash account. Another option is for the founder to use his personal bank account for the transactions. It’s not exactly an ideal situation because it would muddle the monetary records. Without a standalone account, we could not collect payments or even pay our partnering laboratories. That became our biggest problem.”

Other than a traditional banking solution, he considered using Paypal for receiving payments. But that did not pan out too well.

“There aren’t many people that use Paypal locally, so it reflected badly on our end for not being user-centric”, he shared.

Paying salaries through agencies

The other primary use for a corporate account is to disburse salary payments to current employees and partnering laboratories. In an attempt to hack a solution together, he contacted HR agencies to see if they can help handle payroll distribution while he looks for a solution to the other banking issues. What he found shocked him.

“I contacted a few HR agencies and found that they were really expensive. They charge between 30-50% for their service fees. We are just starting up, and it’s too much for us. Even after I negotiated it down to 10%, it’s still pretty high for us.”

NextPay and interbank transfers

While he was in the middle of finding a solution to these issues, he found NextPay.

On top of having an easy sign-up process, what caught his attention was the convenience of doing batch transfers to any major bank and e-wallet in the Philippines.

“One problem we will definitely face down the road is the transfer of funds between banks. Back then, we had to deal with five different banks among our employees. It’s a big hassle because of the manual transfer to each individual. And you cannot just do it in one go. Also, the fees were pretty high. So those were the two headaches we had. And NextPay seemed to solve that.”

After getting on a quick chat with Aldrich Tan, the co-founder of NextPay, he gave it a shot.

Solution

The start of a new chapter

Compared to setting up an account with banks, NextPay’s setup and onboarding surprised Toshi.

“Everything is simple and effortless. I didn’t have to queue or go through long verification processes. Everything is online, and it was really smooth.”

Payment in a breeze

Having been in organisations with legacy processes, Toshi knows exactly how it’s like to do payroll.

“If we have gone through with traditional banking, doing payroll would have taken us 2 to 3 days. In my previous experience, the payroll assistant was always paranoid because of daily transfer limits set by the banks. It seemed unlikely for the transfers to get through by the end of the month in some cases. It was quite scary.”

Toshi finds it a totally different experience disbursing funds with NextPay. Instead of hiring a payment assistant to coordinate between several parties, he now does it himself with just a few clicks.

“For me, NextPay took a lot of stress out of paying my employees. Instead of wasting my time playing around with transfer limits and inter-banking transfer complications, I can now schedule payroll well a week in advance. It’s more or less a ‘set-and-forget’ part of the operations.” he explained.

As for paying partnering labs, he liked that he could key in all his partner’s payment information at once and save their details in his account. The next time he has to pay them, it’s a simple two-step process of selecting them and keying in the payment amount.

“The disbursement payment feature doubles up like a CRM. It eliminates a lot of repetitive, manual work I would otherwise have to engage myself in.”

Invoices that speeds up payment

When it comes to Lab@Home’s customer-facing operations, they used to be bogged down with legacy processes. Things like calling up customers to check for payment take up a bulk of their time.

“With the digital invoice situation these days, every software can generate an invoice. And most of the time, it’s just a PDF document. Or, in an old school setting, a printed piece of paper. It doesn’t do much.”

After incorporating digital invoices into their workflow, Toshi experiences an increase in productivity with automation.

“After integrating NextPay with our system, issuing invoices is now just a matter of a few clicks. Instead of manual data entry, which is what I used to do, I now check through the details, approve it, and send it to the customer.”

He observed that invoices get paid much faster as well.

“I like the invoice feature from NextPay because it’s attached with a payment link. This makes it much easier for our customers to pay. Having the ability to pay straight from the invoice increases the speed and percentage of our completed transaction, which improves our cash flow.”

The automated SMS feature helped boost their branding and customer-centric reputation.

“We spoke to everyone in our operational chain - suppliers, employees and customers. All of them said the same thing; they love that they get an instant SMS notification. From disbursement to digital invoicing, everyone gets an SMS whenever a payment is processed. This is especially so for our customers who have to file for refunds. To them, knowing that they have been refunded through an SMS without having to double-check their bank accounts is an exceptional experience. The SMS feature is, without a doubt, the MVP here.”

Good growth in a company comes with inevitable teething troubles. In this case, it’s monitoring hundreds of invoices generated in a brief span of 2 months.

“I find the dashboard to be really useful. It gives me visibility to know if the customer has paid or not. I know the status of each invoice at any point in time, whether they’ve been unpaid for a certain amount of time or if they’re overdue. And if they are, it automatically sends reminders as well.”

Nowadays, Toshi logs into NextPay every day to monitor the financial health of the business. The increased transparency helped him in managing cash flow and took away what used to be manual work.

Results

Save 2-3 days each month

What used to take days in scheduling payroll can now be completed in 15-20 minutes.

“I like that I can even preschedule salary payment. When I have pockets of time, I log in to NextPay and schedule our employee salary disbursement. Sometimes I do it the week before it’s due. I find this makes me less stressed and gives peace of mind that our employees will always be paid on time.”

Save money; capital reinvested in the business

With payment collection and disbursement being more efficient,, Toshi can now do away with hiring someone dedicated to handling payment issues. He estimates the savings to be around 30% of the total expenses he would otherwise have to spend each month.

“I no longer need an assistant to handle banking transactions. So we saved a headcount. We also saved on transaction fees from the banks, which were really steep compared to NextPay. But the one thing we saved the most if we didn’t use NextPay is from the HR Agencies. That is for sure the biggest savings for us. We can now put those savings into getting more customers.”

Less stress, more strategic time

The ease in handling payment-related matters not only helped take the pressure off from running the business but also allowed for better use of time.

“I remember our CEO used to be worried, chasing me every now and then to ask if we have paid the employees. We don’t have that problem now because we know they are always paid on time. Instead of wasting time handling the banking issues, we now schedule more time for strategic meetings to scale the business.”

NextPay provides convenience and relief

All in all, Toshi will be the first to agree that NextPay eliminated several operational inefficiencies and helped recover valuable time, thus allowing them to save money and level up their business. 

When asked to summarise the value NextPay provides, Toshi describes it as: “Convenience and relief.” He continues:

“NextPay frees up time for me to focus on what matters instead of busy operational work. I think I can borrow the words from our customers. Convenience because NextPay helped us simplify many things operationally. And with the transparency it provides, we have our fingers on the pulse of the business all the time. That gives us an enormous relief from the many uncertainties of running a business.”

Will Toshi recommend any businesses to get into NextPay? Definitely.

“I have already recommended it to friends and family. One of them has talked to their CEO about it. So we’re excited about what’s coming next!”

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