In 2014, 77% of business payment fraud occurred in the form of paper checks.* Did you know that you can help prevent fraud and provide a benefit to your employees by implementing one simple solution? The answer is direct deposit.
What is direct deposit? Direct deposit of payroll is the electronic transfer and deposit of employees’ net pay to their bank accounts anywhere in the U.S. through the Automated Clearing House (ACH) system. You, or your payroll processor, provide the Bank with your employees’ net pay information. Then we process your payroll file and deposit your employees’ paychecks into their bank account(s).
Many of our customers find it easier and quicker to generate ACH files using Merchants Online Banking. Your employees’ net pay is deposited automatically into their account(s) at the opening of bank business on pay day and is immediately available as cash. Your account is debited for the total net pay amount. It’s that easy.
Can direct deposit save my business time and money? Simply put, yes. Here’s how:
- Spend less time on payroll by no longer needing to write/print, sign, fold and deliver checks
- Stop re-issuing lost or stolen checks, which could also be a source for identity theft
- Stop spending money on stop payment fees for lost or stolen checks
- Stop spending money to print checks
According to Paychex, direct deposit can save a business anywhere from $2.87 to $3.15 per check.** Depending on the size of your business, this could amount to thousands of dollars each year.
How can direct deposit benefit my employees? While providing direct deposit is a benefit to your business, it is also a service many employees have come to expect. Employees appreciate the convenience that comes with direct deposit, including:
- Immediate access to funds on payday without having to run to the bank to cash a check
- Ability to direct funds into the account(s) of their preference by dollar amount or percentage
- Protection from fraud by eliminating the possibility of a stolen or lost check with their personal information
To get started with direct deposit for your business, contact your local Merchants Bank.
Are you unsure about how to set up a payroll system for your business? Read this article from the SBA and then talk to one of our local Cash Management experts.