To send or receive payments, we have several options like cash, cheques, or electronic payments. Now a day’s many organizations prefer to use electronic payments. Direct deposit is an electronic method of paying or crediting from one bank account to the other chosen bank account. Payroll Bank Direct Deposits offer a convenient, secure, and reliable alternative to the traditional paper cheque.
How do bank direct deposits work in payroll?
Firstly, the employer must establish a bank account for its payroll activities. The employee submits a copy of his/her bank account information to the employer to enter into the payroll management software. The employer automatically transmits the amount into its bank account on the payday. After crediting the salary to the employee’s bank account, the employer will provide the employee with a pay slip containing essential information, earnings/allowances, deductions, and taxes.
Reasons to switch to the bank direct deposits:
- Automated Employee Payment Deposits: The system automatically adds payments to employee accounts without needing any action on your part. It electronically deposits employee payments into the employer’s bank account and transfers them to each designated employee account.
- Reduced chance of losing cheques or having them stolen: Direct deposit removes the possibility of loss. It electronically transfers funds into employees’ bank accounts and safeguards sensitive data. Employers still provide employee pay stubs.
- No need to spend time visiting banks or ATMs to deposit cheques: Employees don’t have to wait in line at banks to deposit a paper cheque, Our Payroll management system provides employees with a mobile banking app/Online banking, allowing them to effortlessly log in and confirm the deposit’s credit to their account.
- Access to the funds right away on payday: The direct deposit feature in HR Payroll software enables employees to receive their payments sooner. The funds become available immediately on payday, eliminating the need to deposit a check and await clearance.
- Maintains an electronic record: It maintains a record of the payment in the payroll process software. Direct deposit statements show the total amount for the pay period. If necessary, you can examine each transaction in the direct deposit log. You don’t need to manually write the details about the payment.
- Reduces the usage of paperwork: Direct deposit is a paperless electronic process. Reducing the usage of paperwork helps in limiting the impact of the business on the environment and also reduces the carbon footprint.
- Support transfers to all bank accounts and payouts to and from other countries: Employer can send payment to any savings or current or checking account.
To explore Sumopayroll, Sign up!!