Are you still cutting paper checks for employees? Although it may seem easier to stick with procedures you’ve always followed, automating your payroll system can save you hours per week in check-processing time.
A growing number of companies are using direct deposit to pay employees. According to the electronic payments association NACHA, more than $9 trillion was moved through ACH [PDF] in the third quarter of 2012. This was a 2.4 percent increase over the same period of 2011. Growth is expected to continue.
If you choose to automate your payroll, you’ll only need to input the hours an employee works during a pay period to generate an electronic deposit of the appropriate wages. The system can also automatically pay the employee’s payroll taxes and calculate state and federal taxes.
Here are a few benefits to replacing your outdated practices with electronic payroll:
- Savings — The obvious reductions in paper, ink, toner, and postage are only the beginning. You’ll also no longer need to stuff envelopes, print checks, or troubleshoot the printer when it jams. You won’t have to worry about initiating a stop payment or reprinting a check if one goes missing (while in an employee’s hands or the mail). Plus, you’ll eliminate headaches at tax time, because your tax forms will be completed for you.
- Employee morale — Many banks offer special interest rates and other account perks to customers who use direct deposit. Your workers will also have peace of mind that their checks will be deposited on the designated day — and they won’t have to wait in line at the bank on a Friday afternoon.
- Mobile access — On the road? Don’t worry, you can process payroll from a hotel room, a busy airport terminal, or a beach chair. Your ability to manage payroll from a mobile device is a convenience you’ll never get from a paper-based payroll system.
- Payroll notifications — When it’s time to run payroll, you’ll receive an email reminder. You can log in from any
computer, tablet, or smartphone and view a list of employees on your payroll. Just point and click to enter information about hours worked. You’ll also be notified when certain tax forms are due.
- Reports — Automated payroll software also lets you periodically run reports on your activity. Discover wages paid to one employee or groups of employees, workers compensation paid, total tax liability for your employees, and more. You’ll also be able to export your information to bookkeeping software, which helps you more easily manage your budget.
It’s a brave new world, even for small-business owners. By modernizing your administrative processes, you can save money and position yourself as a progressive employer who embraces today’s technology.
Want to get started with EFT? Check out Intuit Online Payroll.