Here is Why Businesses Should Use Direct Deposit

If you’re accustomed to giving employees paychecks at the end of each month, you might want to consider transitioning over to direct deposit. You need to ask yourself, is it worth temporarily shaking up your business to go through a potentially rocky transition period? We think so, and we’re going to explain why!

Save Money on Payroll

First and foremost, paper payroll systems cost money. Depending on what source you read and trust, they can cost anywhere from $4 to $20 (also dependent on shipping, postage, packaging, and the hours required to get it all prepared each month). Why go to all the trouble of paper paychecks when everything can be done on your behalf and automatically? Rather than printing and mailing checks, employee paychecks are deposited directly into their accounts electronically.

If you want to save even more money on your payroll processes, you could outsource the task to another company. As experts in the field and with experience dealing with payroll for small, medium, and large companies, they will handle your payroll needs even as you scale the business.

Increase Reliability and Security

Over the years, we’ve all had our paychecks delayed, whether due to an emergency, the vacation of payroll staff, lousy weather, or another disruption entirely. With direct deposits, employees receive their checks automatically. It doesn’t matter where you are, and it doesn’t matter where they are. They receive their paychecks on time and in a secure manner. Before, employees could be on vacation themselves, and they would have to wait until they got back to receive and deposit their checks; this could affect their ability to pay bills and other expenses. Direct deposits remove this problem instantly.

What’s more, checks can get stolen or lost along the way. From the moment they’re printed to the moment they’re cashed, there are several risks to printing paychecks. Sadly, it’s something that happens every single year to thousands of people. Whether through theft or sheer clumsiness, it has a devastating impact on the individual and also becomes an inconvenience to the check writer.

Although it might not surprise you at this point, direct deposits are the solution. When businesses discontinue printing checks, security for both parties improves dramatically.

Save Time

Some employees receive their checks and immediately look for an opportunity to leave to deposit their funds on a break. Imagine not having to deal with paper checks yourself. With direct deposits, you can automate the process, everybody saves time, and everybody can be more productive. Since we have the technology to make payments instantly, it makes sense to utilize it in business. Even for those that cash checks with their smartphone, direct deposits still remove the distraction.

Everybody Wins

Why should businesses use direct deposits? As we’ve learned in this guide, everybody wins. Here’s a summary of the main benefits;

  • No waiting in line at the bank for employees
  • Also, no long lunch breaks or leaving work early
  • No delays for employees (they receive money instantly)
  • Safe and confidential for both employee and employer
  • Employees typically receive earnings the same day
  • Payments go ahead regardless of circumstances (employees can access money even when away from home)
  • Mistakes can be corrected quickly and promptly
  • Removes the risk of human error that comes with physical checks

Finally, we haven’t yet mentioned that setting up direct deposits can be simpler than you might think. Especially if you want to save time and money by outsourcing to experts, you can get started almost immediately; we’re sure your employees will appreciate the switch. Having a payroll service in place will also help you manage your small business accounting better.  Why not research more today or even call a meeting to discuss the change with your team?