If your employees are mostly part time and/or on the younger side, many of them may not have bank accounts to deposit their paychecks. FlexWage Solutions offers an alternative for employers to allow their employees to receive access to their paychecks in advance of payday. The company produces debit-like cards that employers can issue to their employees instead of paper paychecks. The advantages are many, including lower payroll costs for employers and no check cashing fees for employees. Plus, since the cards can carry an advance on their pay, employees are more productive—since they don’t need to worry about making it to payday.
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Posts Tagged ‘small business payroll’
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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