The term direct deposit does not apply to payroll only. This can be a time and money saving service to businesses in other ways too. What about the checks written for expense reimbursements or commissions? For a corporation, how about depositing the dividend checks of shareholders into the bank accounts of their choice?
Today, it’s easy to offer this service and help Maine-based small businesses become more efficient at the same time. Consider these benefits of direct deposit for many types of payments:
Check stock. With direct deposit, companies save money, storage space and time. Since direct deposit eliminates the need to write some checks, your company prints fewer checks. Paper checks can cost as much as 30-50 cents each, whereas a direct deposit generally costs 4 or 5 cents to process.
Check printing hardware. Since check printing equipment and automated signature machines are subject to less wear and tear, they’re likely to be repaired less often. Some businesses may eliminate the need for this type of equipment altogether.
Security and facility space. Many companies keep check stock and the automated signature machines in a vault of some kind to ensure security. With direct deposit, the security and control risks are gone and this space can be used for other operations.
Reissuing lost or stolen checks. The headache of having to issue stop payments, and reissuing new ones, on lost payroll checks goes away with direct deposit.
Bank charges. Fees and service charges can be reduced by as much as 75 percent because paper checks are expensive to process.. Because costs are much lower for direct deposit than for paper checks, banks charge lower fees for these automated services.
Errors. Because direct deposit requires less handling than check payments, mistakes are reduced.
Account reconciliation. Because direct deposits are issued and cleared electronically on a specific date, account reconciliation is a much simpler process. Instead of individual check entries to reconcile, there will only be one entry for all of the checks.
Cash flow management. Business’ cash managers know exactly when they need to have funds available and when funds are used.
Fraud. Direct deposit eliminates fraud. There is no more worry of forged signatures or altered amounts.
Payroll administration costs. Electronic deposits eliminate many manual check processes, possibly lessening payroll costs.
Increased productivity. Direct deposit eliminates the time employees take to deposit their paychecks.
For more information about how direct deposit can help your small business, contact Filler & Associates.