The Benefits of Direct Deposit

The benefits of direct deposit are overwhelming. Employers who commit to direct deposit may be surprised to learn just how many advantages are offered to both employers and employees.

Potentially the biggest benefit that direct deposit provides to employers is the cost, compared to the cost of traditional checks. Traditional checks can cost employers anywhere from $2 - $5 per check. This figure typically depends on the time spent processing checks and the time employees spend cashing them. Even $2 per check amounts to a hefty sum, especially for larger employers.

The cost of writing traditional checks falls into two categories: materials costs and staff time. Materials costs refer to the actual paper and ink. It doesn’t seem significant without examination, but when analyzed this cost can amount to as much as $1 per check.

Staff time is a more complex: the cost of the employer’s time and the costs of the employee’s time. Increasingly companies are gaining an awareness of the benefits of focuses only on core competencies. Gaining expertise in business management can actually “dilute” staff time spent on gaining expertise in the actual business. Additionally, staff members must use personal time to complete banking transactions.

The savings from providing direct deposit services is significant. Direct deposit services often cost as little as $1.50 per check, plus a $1.50 transaction fee for the entire transaction. The more employees, the more cost effective, especially if a company is paying over $3 per check for traditional paychecks. And many banks do not charge transaction fees.

Direct deposit also benefits employees, which in turn benefits the company. Employees prefer direct deposit for convenience. Employees often feel a sense of security as a result of the regularity that direct deposit provides. Most direct deposit programs are set up for deposits at the same time, on the same day every pay period. That way on even during vacations and sick leave a staff member’s check is automatically deposited.

Studies show happier employees are motivated. Teresa Amabile and Steven Kramer, authors of The Progress Principle, write "people are more productive and creative when they have more positive emotions.” Direct deposit can help keep positive emotions running high among employees when they are freed from the stresses that traditional paychecks provide.

Interested in a reliable direct deposit program? Call the experts at Horizon Business Solutions at 614-577-1700 or visit their website at www.horizonbiz.com. Regardless of your business management concerns, Horizon can help.

Jessica Harmon | 09/05/2012

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The Benefits of Direct Deposit