Modern employers and small businesses need options.
Especially when it comes to maintaining payroll processes and paying workers. Although paper checks are still an acceptable form of compensation, digital and electronic payment methods offer increased flexibility, convenience, and security. According to a survey by National Automated Clearing House Association (NACHA), 82% of American workers receive direct deposit, making it a choice worth pursuing.
Direct deposit is one way to deliver payment quickly and efficiently. In this blog, we’ll explore what direct deposit is, why your business should consider it, and how to get started.
What is direct deposit?
Direct deposit is the electronic form of a paycheck. It’s an electronic transfer of funds from an employer’s business bank account to an employee’s bank or credit union account. It’s also known as an Automated Clearing House (ACH) transaction. This process requires the employee’s name, bank account number, routing number, type of account, bank name and address.
When you run your payroll, employees who have elected to receive their pay via direct deposit will have their paychecks automatically deposited into their bank account.
Why direct deposit?
There are many reasons why you should consider streamlining your payroll processes with direct deposit.
- Cost-effective. Processing payroll checks involves costs related to printing, distributing, and managing physical checks. Direct deposit eliminates these costs, freeing up your resources for other aspects of your business.
- Time-saving. Direct deposit is automated, reducing time spent manually processing. It simplifies payroll management, allowing you to focus on growing your business rather than administrative tasks.
- Enhanced security. Checks can be lost, stolen, or tampered with, posing a security risk. Direct deposit is secure, ensuring your employees' wages are transferred directly into their bank accounts without the risk associated with physical checks.
- Employee satisfaction. Direct deposit is fast and convenient. Your employees will have immediate access to their funds on payday, without the need to visit the bank. This not only improves their experience but also reflects positively on your business.
- Eco-friendly. By eliminating paper checks, you contribute to environmental sustainability. This resonates well with both employees and customers in today's eco-conscious world.
Make the switch
Switching your payroll processes to direct deposit is straightforward, and at First Bank you'll receive quick setup with white-glove service from our Treasury Management team, including complimentary on-site setup, in-person training, and ongoing support for as long as you need it. This ensures a smooth and hassle-free transition for both you and your employees.
Connect with our team today to get started or learn if direct deposit is a good fit for your business.
