When it comes to being a business owner, there are several onerous tasks that you may have to keep up with. You may not have had to do these tasks previously in a corporate setting where such work was delegated to others, but you have to do them now because you’re low on manpower.
One such task is the arduous responsibility of completing payroll. Paying your employees, while it certainly is a crucial function to your business, is also one of the less enjoyable things you do as an entrepreneur.
To make that task easier, you should offer direct deposit as a payment option for your employees. Not convinced? You’re in the right place — in this article, we’ll give you seven solid reasons why direct deposit is the best way to pay your employees.
1. Pay Your Employees Quicker
The first reason why you should offer direct deposit is so that you can pay your employees quicker. Your employees will no longer have to wait for a physical check in the mail and then go cash that check in the bank. In addition, your employees can have their check automatically deposited into whatever account they want like these savings accounts. This way the employee can earn interest on their money automatically.
Paying on time has significant benefits for you. The most important benefit is that you keep your employees happy. A happy employee is a productive one that won’t leave you.
One of the most expensive HR costs that businesses have to deal with is turnover. When an experienced employee leaves, the company has to take on recruiting costs associated with finding another candidate.
Then they have to consider onboarding costs for the first few weeks. And the company may not even really see full productivity from the new employee until they’ve been at the company for several months, long enough to get good at their responsibilities.
You can avoid all this by keeping your employees happy with faster payments brought to them by direct deposit.
2. Save on Paperwork
If you’re like most other business owners in the world, then there’s a good chance that there’s nothing you hate more than having to do paperwork. You want to go out there and do what you’re really good at: growing your business. Paperwork seems like a waste of time.
And with direct deposit, that’s exactly what unnecessary paperwork is: a waste of time. By utilizing direct deposit, you’ll cut out the time that you would have spent printing out checks, putting papers in envelopes, and sticking stamps on them.
All of this increased efficiency translates into more time spent doing other things that grow your business.
3. Keep Better Records
One significant consideration than any company’s payroll processes need to be aware of is pay disputes. If you stay in business for a long time, it’s practically inevitable that one of your employees will start to raise a stink that he or she is not getting paid the amount agreed upon in their employment letter.
The way that you can back yourself up against these pay disputes is by keeping excellent records of your payment history. This is done automatically when you offer direct deposit because banking institutions are obligated to keep track of these transactions.
That means that whenever an employee raises a pay-related stink, you both can go into your bank accounts to check out what really transpired. If you did indeed make a mistake, then you’ll be able to identify it and fix it. And if you’re free-and-clear, then you can show your employee that with cold hard documentation.
4. Generate Paystubs Automatically
One principal task in completing payroll is creating the paystubs that go alongside the payment history. These paystubs contain information regarding gross earnings, deductions for tax withholdings and benefits, and net earnings.
When you’re not using direct deposit, you may have to do these calculations manually. But if you do use direct deposit, then you should be able to find a free paystub generator online that will integrate with your direct deposit processor to automatically create those paystubs.
Again, this translates into one thing: more time for you to focus on the more pressing needs of your business.
5. Improve Security
What happens when a check gets lost in the mail? What happens if the envelope containing the check gets stolen?
When you have physical documents traveling from one place to another, there’s always a risk of that document falling into the wrong hands and being compromised. Thus, when you limit the paperwork by choosing direct deposit, you also improve the security of your employee payments.
No one can intercept those payments unless they hack into your payment processor’s network. Federal regulations ensure that these networks are very tightly secured.
6. Be Environmentally Responsible
Another side effect of a lack of physical paperwork is that your business is able to be more environmentally responsible. Much of a typical business’s carbon footprint can be attributed to its paper consumption.
If you’re passionate about doing your part to save the world’s rainforests and stop climate change, then one of the easy ways that your business can live that philosophy out is by choosing direct deposit over physical checks.
7. No Additional Fees
The last reason why you should choose to use direct deposit is that it’s free to do! The payroll software that you already use to calculate your employees’ earnings will probably have a built-in direct deposit processor that you can use absolutely free of charge.
With no cost to you at all, there’s no way that you can experience anything apart from a positive ROI when you offer biweekly or weekly direct deposit to your employees.
Offer Direct Deposit Payment Options for Your Employees Today
There you have it. Now that you know all the reasons why you should offer direct deposit as a payment option for your employees, there’s no reason why you should be printing and mailing checks any longer.
If you’re looking for more business advice, then you’re in the right place! Be sure to take some time to check out the rest of the articles available to read on the website before you leave!