Direct Deposit Pays Off
Switching to direct deposit will not only save some trees, but it can help your bottom line. A new report from the PayItGreen Alliance, an electronic-payment advocacy group, found that employers who switched to direct deposit saved more than $600 million per year for the past ten years. The savings were equal to an average of $176.55 per employee annually.
Direct deposit has been around since 1974, but 15 percent of American employees still do not have the option, according to The Payments Authority, the trade association that sponsors PayItGreen. Many of those without access are working for small or mid-sized companies, says Amy Smith, president of The Payments Authority. "Most large businesses have jumped on the bandwagon. What we are trying to do is to get small and medium-sized businesses to take a second look."
While some employers may worry about the cost of implementing a direct deposit system, this report suggests that the paper-route is more expensive. In addition, it can be riskier. "Paper payroll checks can get lost or stolen," says Smith, "Electronic transfers are safer and more secure."
Finally, direct deposit can smooth out your company's finances. Because payments are scheduled, direct deposit can make available company funds more predictable. "There is just one debit for the total amount of the payroll," says Smith, "And everybody is paid on time."