financial bookkeeping tips for contractors

What Are the Advantages of Switching From Direct Deposit to Paycards?

When it comes to getting paid, employees need and want the most reliable process. On the same note, the more reliable and seamless a payroll process is for employees, the less strife a business will face. These are the reasons why so many businesses go to great lengths to ensure there are no issues with paying employees, and for a long time, direct depositing employee paychecks into their private bank accounts were treated as the most logical solution. However, there is another payment method for payroll that is actually more convenient and less likely to create issues: paycards. Here are a few advantages of switching from direct deposit to paycards as a small business owner. 

Pay cards do not require employees to have a bank account. 

Even though it is pretty common for individual employees to have their own personal bank accounts, not all of them do. This means that sometimes employees who are hired for your company have to go out and get a bank account just to get paid on payday, which can be a major inconvenience. With a paycard, the employee only has to register for the card and then activate it; they do not have to go out and open a bank account. 

Problems with private accounts can result in canceled and returned payments. 

When paying employees successfully relies on employees having a bank account in good standing, there can be issues. For example, if an employee's bank account gets closed because of an overdraft, the deposit sent out from your business for wages can be returned or rejected by the bank. Therefore, it will take extra time for your payroll department to resend the employee's payment, and that is if they already have a new account set up. With a paycard, these issues are less likely to occur. 

Paycards level the payroll platform among employees. 

Differences in how private banking institutions handle direct deposits can make it so that pay among employees is not always the same. For example, one employee may get paid on Thursday as soon as direct deposits are authorized, and another employee may not get paid until Friday because their banking institution has slower processes. When every employee has a paycard, you will know that every employee will have the same experiences with the institution backing the card, and they will all get their pay on the same date.  

Talk to a local payroll services provider about how paycards can benefit your small business.

About Me

financial bookkeeping tips for contractors

As a renovation contractor, I have a lot of things to worry about each day. I have to think about my customers, my business, the insurance I need and even the employees that I have working for me. All of these things keep me busy enough without having to worry about keeping up with my financial bookkeeping each day. How do you keep up with the financial bookkeeping so that you don't make any errors that could cost you a whole lot of money? I have worked with my accountant to develop a process that has helped me and I have shared the tips he has taught me right here on my blog to help you.

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