Companies are always looking for ways to streamline their payroll processes. One of the most common methods is utilizing direct deposit via ACH. According to a study conducted by Javelin Strategy and Research, 82 percent of employees are now paid this way, up from 74 percent in 2011. More organizations are making the switch, citing the benefits of the practice. When informing employees of the change, companies should make sure to educate them on the advantages of direct deposit via ACH. Let’s take a look at some examples:
Employees often worry about their personal information and its safety. They want to know their identity is secure and not subject to theft from hackers. Providing a bank account number on a regular basis can be worrisome for workers, so direct deposit offers an extra sense of security, according to Pay Simple. The necessary information for an ACH transfer is entered into a protected system, complete with encryption, making it very difficult for fraudsters to gain access to the data. Being paid via paper check, however, requires workers to write out the same information. Since multiple people exchange the documents, the materials are subject to more risk. Electronic transfer of the information protects the data from being left out in the open for the wrong person to take advantage of.
Businesses and their employees alike have bills to pay and costs to consider. It can be difficult to manage these responsibilities when both parties wait on checks to clear. The process of mailing and receiving the documents, taking them to the bank and depositing the funds can put workers and their employers in a time crunch. Using direct deposit via ACH increases time efficiency and enables people to better handle their finances. Employees can divide the funds into a number of bank accounts as they see fit. Knowing the amount paid to them on a monthly basis helps workers organize their bills and ensures they’re all paid accurately and on time.
It’s easy to see why direct deposit via ACH is a green initiative. Less paper makes companies more environmentally friendly and allows them to cut costs by eliminating checks. This is beneficial for companies in other ways, too. Not only do job-seekers prefer businesses focused on sustainability, but a UCLA study also found employees at greener organizations are more productive. Overall, implementing direct deposit via ACH can have a domino effect on the positive influence and image of a company.
Employees are appreciative when workplace elements are easy for them. While cashing checks isn’t the most difficult task, companies that implement direct deposit will see how much more convenient the practice is for workers. Employees can receive their pay no matter where they are – whether they’re out sick or on vacation. Furthermore, the money transfer is quick, cutting out the time receiving checks takes. The flexibility of dividing the funds into multiple accounts also makes financial planning easier.
“Almost 90 percent of employees are satisfied with direct deposit via ACH.”
Direct deposit via ACH offers employers and their workers several benefits. It’s important for companies to share these advantages with their workers prior to making the change. Clear communication will ensure people aren’t overwhelmed by the alteration and can use it to the best of their ability.
Whether your company does or does not use direct deposit via ACH, chances are you’ve heard of it before. In fact, 79 percent of consumers who do not utilize the process are familiar with the service. These companies realize the system is safe and secure and allows them to better control their finances. On top of that, 87 percent of employees are highly satisfied with direct deposit via ACH. Also, with faster transactions on the horizon, businesses and their employees have a lot to look forward to.
“With the advent of new capabilities like Same Day ACH to better support hourly and part-time workers, financial institutions, employers and payroll providers will have new opportunities to encourage adoption and use of Direct Deposit via ACH,” said Janet O. Estep, president and CEO of NACHA.
Cachet offers ACH processing direct deposit payroll processing for companies and their payroll teams. Whether it’s direct deposit, 401(k) payments or expense reimbursements, Cachet provides the expertise businesses need to save time and money on payroll.
Check out our infograph for an insightful illustration of good reasons to use Direct Deposit.