Is there a full moon because I have been seeing some interesting things in the HR Tech space recently?! Over the last few weeks, I’ve had two separate clients reach out with questions about billing recovery attempts by their HR Tech vendors.
The first, was one of many impacted clients to receive a letter from a very prominent benefits administration vendor informing the client that they would now be charged sales tax on their software-as-a-service, data processing, information systems, and implementation services… and also be required to pay the back taxes from 2013 and 2014. Exactly the letter every employer wants to receive…not! Just when you thought it was safe to go into the SaaS market for HR Technology, you get smacked with taxes for it! This unexpected cost definitely shows the value of a Total Cost of Ownership (TCO) analysis- to prevent your sales rep’s oversight of potential taxes.
The second, received an email from their benefits administration vendor (a different vendor from the one previously mentioned) requesting back payment for a service they were receiving but hadn’t been billed for. This vendor had failed to include the COBRA premium in the monthly invoicing and wants the client to pay that back now. (The client signed their contract with this vendor in 2013…and they just now noticed the “glitch in their system” which left off the COBRA premium billing.) This client was also supposed to receive the decision support tool and total compensation statements; however, they were never set up, and most likely won’t be at this point despite being paid for by the client. Fortunately the cost of COBRA and the decision support tool plus total compensation statements are the same, so the solution was a creative strategy of suggesting the substitution of one service in arrears for the services that weren’t delivered.
I’m hoping this isn’t a new vendor trend and rather a few full moon coincidences, but I still wanted to give you all a heads up as to what we are seeing in the market and make sure taxes are something you and your vendor discuss prior to signing a contract so you aren’t hit with unexpected costs that could throw off your budget. It is also a good idea to keep an eye on your monthly charges to ensure you are getting exactly what you are (or aren’t) paying for.
If you have a similar experience, please share below or let us know if we can help escalate this issue with your vendors. Make sure to follow @HRTechKaiser on Twitter for the latest HR Tech-related updates.