Direct deposit is a great way to streamline payroll processing for businesses and employees. It also allows employees to plan their finances more efficiently, ensuring they have money in their bank account when it is supposed to be there.
However, there are some safety issues to consider when using this payment method. Paper checks can get lost in the mail or stolen, and cash payments may be difficult to track if someone intercepts them.
Set Up a Schedule
Direct deposit Dubois PA, is a safe and convenient way to transfer funds between accounts. It’s also the preferred method for payroll processing and can help businesses reduce costs by avoiding fees levied when a check is returned undeliverable, lost, or stolen.
Getting your paychecks via direct deposit eliminates the need to write and mail checks, which can take time to prepare, package, and deliver. This helps reduce the likelihood of errors that might be made during these processes and helps save money on supplies.
As an added benefit, individuals can split their deposits and have their paychecks sent to different bank accounts for savings, emergencies, or large purchases. This can make keeping track of bills and managing budgets easier, especially when working with a partner or sharing expenses.
Setting up direct deposit for your employees varies slightly from business to business. Still, it generally requires each employee’s routing and account number, which can be found on their bank checks or online banking portal. Once this information is collected, you can run your first payroll with direct deposit to test the process.
Send a Voided Check or Deposit Slip
Direct deposit makes payroll and other payments go electronically rather than by paper. If your employer or other entities like Social Security and unemployment will be sending your payments electronically, they will need your bank account information. Providing a voided check is a simple way to share that information quickly.
To void a check, write “VOID” across the front of it. This ensures no one can use the tabs to withdraw money from your account.
Your employer will likely request a voided check to verify your routing and account numbers before setting up direct deposit. However, some employers may also accept a deposit slip or other methods of sharing your banking information. Some banks even print starter checks with your routing and account numbers, which you can give to your employer instead of a blank check. This can be an easier option for many people. It’s also more cost-effective for both small business owners and employees.
Set Up a Routing Number or Account Number
Whether employees sign up for direct deposit through their employer or independently, they must provide their bank’s routing and account numbers on their form. Often, this information is provided on a checklist or the back of their check. However, they may also submit it via their employer’s employee self-service portal or a separate document.
The routing number, which identifies the financial institution, and the account number, which recognizes an individual’s bank account, work together to complete transactions. The routing number is publicly available, while the account number is only accessible to the bank’s holder.
In addition to routing and account numbers, employees must often provide the name of their bank, the type of account they have (checking or savings), and how they want funds deposited (as a whole paycheck or divided between multiple accounts). It’s worth confirming the routing and account numbers with the bank to ensure that the information is correct and that the valid account is being used for deposits.
Check with Your Bank
Direct deposit makes it easier for employees to save money, avoid fees, and manage their finances. This service electronically transfers paychecks or benefit checks into a bank account, checking, or prepaid debit card before the scheduled payday, freeing time and cutting costs for employers and workers.
It also eliminates the need for expensive paycheck paper and office printer ink and the additional expense of mailing physical checks. Using direct deposit is typically up to $3 cheaper per paycheck than processing checks manually and can be even less costly when spread across the entire team of employees.
If you’re setting up direct deposit, your employer may ask for a voided check or deposit slip to verify your routing and account numbers. If this is the case, write “VOID” across the front in large letters and cover all essential fields on the check so it’s unusable if lost or stolen. Then, submit it with the rest of your direct deposit paperwork to your employer.