Question

Explain the ways in which electronic transfer of funds can improve payroll processes.​

Answer 1

Most of the firms in US currently pay their employees by direct deposit to them approximately 82% of the entities .But before such transfer is made the incharge of payroll should verify about all the reports being properly made and then grant permission . With the direct transfer to the employees entity has the following benefits :

@ Cost savings :

The time spent on preparing the payroll is greatly reduced which involves Writing ,signing, and folding the checks, stuffing them into envelopes, and delivering the cheques can be very labor intensive. Half the day or may be a full day would be spent on only this work . These paper costs are reduced as cheques and envelopes will no longer be required.

• Direct deposit saves the money by reducing costs associated with re-issuing cheque’s due to them being lost or stolen , stop payment charges that may be levied by a bank could also interrupt the payment , and investigating when a cheque has gone missing if they are not account payee.
• Savings in time when employees need no longer take leave to deposit the cheque’s or get them encashed .
• Human resources and payroll staff can be avoided of being having to stay in the office to manually prepare cheques .Deposits can be remotely processed.

@Employess convenience :

There are multiple ways to pay employees, but direct deposit is the method with the greatest benefits to employees and employers. Employees no longer have to wait in line to deposit or cash their cheque.

Also, an employee doesn't have to be in the office to get paid. If they are on vacation or on a sick day, they can be assured the deposit will be made.

Having control over where the paycheque goes is another way direct deposit provides flexibility and convenience for employees. They can direct funds to go to a retirement savings plan or a checking or savings account or even split between multiple accounts. Bills can be paid immediately online as soon as the deposit is made.

@Other benefits

Sometimes things happen, and you’re unable to process payroll before the cheque date. With advancements in electronic payment technology like Same Day ACH – that’s OK! Same Day ACH offers flexibility to enable your business with more control over your funds.

Having a paperless payroll system is environmentally friendly because it reduces a company's carbon footprint. The green impact can be further expanded by offering online pay statements that can be available 24/7.

In addition, lost or stolen checks are a common source for identify theft, and fraud. Electronic deposits can increase the protection of both employee’s personal information and the employer’s account information.

Finally, with savings per check ranging from $2.87 to $3.15*, the implications could be great for a company that may employ hundreds of people. Once the accounts are set up, the benefits will be realized immediately. Direct Deposit provides peace of mind for employees and employers alike, so be sure to explore the options that are available.