Posts Tagged ‘direct deposit’

How Direct Deposit Can Save Your Business Money

September 8th, 2011 :: Maria Valdez Haubrich

By Maria Valdez Haubrich

Are you looking for a way to put several thousand dollars a year in your business’s bank account—without doing any additional work? A recent survey of small business owners by NACHA — The Electronic Payments Association showed that the average business could save from $2,000 to $7,000 annually by using direct deposit.

Cutting and processing a hard-copy check cost a business up to $2, compared to $.35 or less for direct deposits.

However, the same survey also showed that many businesses aren’t taking advantage of the benefits of direct deposit. Some 48 percent of survey respondents do not use direct deposit for payroll.

Direct deposit has other benefits besides saving your business money. It’s a nice perk for employees, who prefer not having to schlep to the bank and wait in line to deposit their paychecks. It also helps the planet by cutting down on paper waste.

According to the NACHA survey, the 10 industries least likely to use direct deposit are repair and maintenance services (plumbing, pest control, etc.); food services (deli, fast food, restaurants); personal care services (hair, nail, spa); retail (all types); construction; wholesale trade; arts / entertainment; real estate sales / rental / leasing; agriculture / fishing / mining; transportation.

The survey also showed:

- 18 percent of small businesses with revenue between $10 and $20 million still do not use direct deposit.

- Businesses with less than 75 percent salaried employees are more likely to not use direct deposit.

- 20 percent of small business owners that don’t use direct deposit go to their financial institution 15 or more times per month, wasting valuable time.

Direct deposit isn’t the only way to go paperless. Using direct payment (that is, paying your vendors and suppliers via electronic funds transfer) can save an average of 11.5 percent per payment and three days of employee work time annually. The average small business pays 96 vendors by check each month – which when switched to direct payment, could save thousands annually.

If you’re interested in using direct deposit or payment, talk to your bank. The steps you need to take are simple, and businesses of any size can use direct deposit. Curious about how much you’d save and how much you would help the planet? NACHA and PayItGreen, an organization that educates businesses about savings from going paperless, have created a simple calculator to reveal any business’ carbon footprint savings by switching to direct deposit.

Image courtesy Karen Axelton

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Tags: direct deposit, small business accounting, small business payroll
Posted in Accounting and Taxes, Compliance, Small Business, small business, Workforce | 6 Comments »

How Direct Deposit Can Save Your Business Time, Hassles and Money

June 6th, 2011 :: Rieva Lesonsky

By Rieva Lesonsky

Are you looking for ways to simplify your life, streamline your small business and keep your employees happy at the same time? Then one option you should consider is using direct deposit for payroll.

A recent survey by NACHA — The Electronic Payments Association found some surprising news: 48 percent of small business owners do not use direct deposit for payroll. That can be a big mistake, because direct deposit is an easy way for your small business to save thousands of dollars, increase your employees’ satisfaction and reduce your business’s impact on the environment each year.

The top 10 industries that NACHA found are least likely to use direct deposit includes many typically small businesses: Repair and maintenance services (plumbing, pest control, etc.); food services (deli, fast food, restaurants); personal care services (hair, nail, spa); retail (all types); construction; wholesale trade; arts / entertainment; real estate sales / rental / leasing; agriculture / fishing / mining; transportation.

The survey additionally reveals:

Even as small businesses get bigger, many of them still don’t use direct deposit. Eighteen percent of small businesses with revenue between $10 million and $20 million still do not use direct deposit.
Businesses where less than 75 percent of workers are salaried are less likely to use direct deposit.
Small businesses that don’t use direct deposit waste a lot of time. One-fifth of small business owners who don’t use direct deposit in their business visit their financial institution 15 or more times per month.

Direct deposit isn’t just for your employees—you can also use it to pay vendors. According to the NACHA survey, small businesses pay an average of 96 vendors by check each month. Switching these to direct payment could save the average business thousands of dollars annually when the cost of cutting and processing checks as well as employee work time is taken into account.

Here’s how the savings from direct deposit breaks down:

It costs a business up to $2 to cut and process a hard-copy check vs. $.35 or less for direct deposit.
A business with 25 employees would save at least $2,000 a year. A business with 100 employees would save at least $7,000.

Of course, there’s also the savings in terms of printer ink, paper and envelopes that you won’t be mailing. NACHA and PayItGreen have created a simple calculator that helps you determine your carbon footprint savings of switching to direct deposit:

Many employees expect direct deposit these days—and offering them this convenience is one way your small business can compete with bigger employers.

My company uses direct deposit; we wouldn’t have it any other way. Switching over is simple—just talk to your banker or financial institution.

Image Courtesy: Karen Axelton

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Tags: direct deposit, small business accounting, small business workforce
Posted in Accounting and Taxes, Compliance, Small Business, Technology, Workforce | 4 Comments »