For managers of SMBs like you, this change to the labour standards is excellent news. The technology used to automatically deposit your employees’ pay in their bank account has existed for a long time, but thanks to the new standards, it is now easier than ever to take advantage of it.
Direct deposit has so many advantages compared to cheques (for employees as well as employers) that we are always surprised to learn that there are still businesses that opt for the old-fashioned cheque method.
Need solid arguments to understand how the transition to direct deposit could benefit you? Here are 7 very good reasons to make the jump to payroll direct deposit.
Direct deposit is a practical and reliable method to send payroll to employees. Cheques can be lost or handed out late if the employee is not at work on payday. When money circulates electronically, this issue can be removed from the equation.
With direct deposit, many operations are automated. Delays are practically nonexistent and there are much fewer problems.
Money transfers are very safe since they are made by a financial institution that has all the resources and takes all necessary steps to guarantee the safety of the transfers.
When you pay your employees by cheque, they could misplace it or have it stolen. If something happens, you still have ways to remedy the situation, but why take the risk? Direct deposit allows you to avoid these unpleasant situations.
Direct deposit costs less than cheques. Choosing to pay your employees by direct deposit reduces the costs associated with the cheques you distribute each week and the time you spend preparing them. This change will save you a considerable amount of money each year.
The Canada Revenue Agency estimates that it costs you about 80 cents to produce a cheque, whereas processing a payment by direct deposit costs you about 10 cents. Multiply these savings for each employee and for each pay cycle, it adds up quickly!
Replacing cheques by direct deposit makes life easier. Much easier. Simply think of the time that you lose printing and distributing cheques, following up on cheques that have been issued, etc.
Thanks to today’s technological solutions, most direct deposit tasks can be automated.
Therefore, by opting for direct deposit, you greatly reduce the time and effort that you and your team spend on payroll administration.
Not having to deposit a cheque is simply one less thing the members of your team have to manage. Direct deposit also gives your employees rapid access to their money.
They have peace of mind: your employees know that their money will be deposited automatically on each payday.
Not only is direct deposit excellent for employee morale, but it is also a huge competitive advantage for you as an employer to attract a skilled workforce.
Another benefit to consider is controlling the disbursement of funds.
When you give your employees cheques, it's hard to predict exactly when the funds will be withdrawn from your account, since everyone deposits their cheque at a different time. That could sometimes interfere with your cash flow and cause uncertainty.
By opting for direct deposit, you can choose a specific time when the pay for all your employees will be withdrawn from your account to be deposited in theirs.
Last, but not least, is the paper you will save by no longer using cheques to pay your employees. Direct deposit is one of the measures you can introduce to make your business greener.
In order to be even greener, you could also choose to send pay slips electronically. For example, Acomba users can subscribe to MyPaycheque.net which, in addition to automatically sending pay slips by email, can be used to send news, documents and tax slips to employees.
Each SMB has its own needs, but the benefits of direct deposit apply to all businesses, from the smallest to the biggest. Whether your employees are seasonal or permanent, taking the initiative of replacing cheques by direct deposit will benefit them just as much as it does you.
It's a win-win situation for everyone!
If you already use specialized software to process your employees' pay, there are good chances that it offers you more or less advanced direct deposit functionalities.
One thing is certain, automating direct deposit tasks is an excellent reason (among many others) to obtain a solid payroll solution. For example, the Acomba payroll software is known for its reliability and its capacity to meet Quebec tax and legal requirements. It even works with other Acomba compatible applications!
If your current tools do not fully meet your expectations or if you simply want to explore your options, contact our team of advisors.
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