Being a business owner, it is your responsibility to ensure that your employees are being paid at the right time and the right amount. However, with so many provincial and federal regulations, it becomes difficult for a business to get the tasks done on time.
Proper handling of the revenue, including the payroll of the employees, tax deductions, and bills and meeting the deadlines can be overwhelming. Especially for a business just taking off, managing the costs is just not time-consuming but frustrating as well, which can result in penalty charges and interests levied against your business.
This is where many business leaders and entrepreneurs opt for a simple solution — hiring direct deposit services, which are not only convenient but also a secure and cost-effective solution, giving you the opportunity to focus on the essential business operations.
Before getting into the discussion of the direct deposit being the right choice for the business, let’s discuss what direct deposit actually is.
What is direct deposit?
Direct deposit is an electronic method of making payments from one bank account to another. By adopting a direct deposit payroll system, the salaries of the employees working at your organization will be transferred to their respective accounts with a single click of the button.
The process here is simple. Your business sets up an account to transfer the funds from to the accounts information provided by the employee. When the payday rolls around, paycheques are transmitted quickly and securely to their accounts.
Using direct deposit services provides benefits to employer and employees alike. Being a small business, taking advantage of direct deposit payroll enables the employers focused on the business and employees motivated as they can get their salaries on time.
Benefits of direct deposits for the employer
Direct deposit payroll benefits your organization in a way that other employee pay processes cannot. For example, where there is a certain appeal in paying the salaries in cash, especially when it comes to new companies, it is not really the best business practice.
Not only does the cash payments make it tempting for the employees to avoid declaring the income they receive from the business at tax payment, but it also prevents them from taking advantage of the pension and insurance programs.
On the other hand, direct deposits are time efficient and a cost-effective solution than printing out and distributing the paycheques. Although there is a fee involved when setting up the direct deposit, it can save time and money, as well as help with the cash flow in the long run. There are three ways it can help your organization.
- It can cut down the cost of purchasing paper cheques
- It allows you to review transactions, generate financial reports, reconcile accounts, and provide a clear view of the cash flow as soon as the funds are transferred into their respective accounts
- You don’t have to investigate or reissue the lost or stolen paycheques.
- It also reduces the risks of fraud and theft of the paycheques while eliminating the need for printing and storing the payroll records.
In simple words, it saves the business person the time and makes it easy to store data in the cloud where it can be viewed and retrieved from anywhere at any time.
Benefits of direct deposit for the employees
There is no question that direct deposit payroll is more efficient and convenient for the employees. Not only does the transferring of the funds enable immediate access to the funds for the employees, but they also benefit in:
- Not having to go to the bank to cash or deposit the paycheques
- Not having to be physically present at work to get paid as the funds are electronically transferred to the account
- Not having to fret about misplacing or damaging the paycheques before they are deposited to the account.
There are many things that can keep you from meeting your payroll obligations on time. However, with the direct deposit services at your approval, you can easily avoid the risk of running late in providing your employees with their hard-earned wages.
What to for when hiring a direct deposit service?
Whether you are a new organization hiring a payroll service or an organization looking for a switch from your current process, it is easy to get started with the direct deposit. A great way, to begin with, is to look for professional services that can provide accuracy, reliability and convenience for payment processing and record-keeping.
The greater the number of employees you have, the more complex your payroll obligations are going to be. However, this also means that your business is growing rapidly. This is where hiring a professional payroll service is an effective way to free up the time to focus on business operations and interests.
Author Bio: Fernando Alston is a graduate from the University of California and holds a degree in architecture and building design. He is currently working at the KW Building Design as an assistant manager with a vision to take his team forward in the firm. He is highly acknowledged for his work at the firm that motivates him to become better. Besides designing, he also loves to paint and read mystery novels.
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