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Why to Offer Direct Deposit to Employees

March 30, 2000
Related Topics: Compensation Design and Communication, Featured Article
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In case your CFO needs convincing...

Direct Deposit can save your company money.

  • Companies can save up to $1.25 per payment by using Direct Deposit instead of checks.
  • Direct Deposit eliminates the cost of delivering checks to employees at different locations.
  • Direct Deposit eliminates the chance of lost or stolen checks and the resulting charges for stopping payment and check replacement.
  • To see how Direct Deposit can save your company money, use a Benefits Calculator available at www.directdeposit.org/companies/calculator.html

Direct Deposit can save your company time.

  • Direct Deposit makes payroll reconciliation easier and can help you streamline your tax reporting at the end of the year.
  • With Direct Deposit, there is no need for special check handling when employees are on vacation or out of the office.
  • Direct Deposit reduces time spent storing and securing unissued checks because check stock is not required for the payroll earnings record.

Direct Deposit can help your company gain productivity.

Studies show that some employees spend the equivalent of three workdays each year going to the bank to deposit their paychecks.

Direct Deposit benefits employees.

  • Ninety-seven percent of employees who use Direct Deposit are very satisfied with it.
  • The chance of your employees having a problem with a check is much greater than with Direct Deposit.
  • Direct Deposit is especially helpful for employees who travel and those who work from home because they collect their pay without visiting the office or the bank.

 

SOURCE: The Direct Deposit and Direct Payment Coalition, March 2000. The coalition was formed to promote the benefits of Direct Deposit and Direct Payment to consumers, companies and the country. The coalition, composed of the Federal Reserve, NACHA: The Electronic Payments Association and regional ACH associations, sees Direct Deposit and Direct Payment as leaders in a system that is moving quickly to electronic payments of all kinds.

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