Franchisees nationwide are looking for new ways to cut costs and improve efficiency. Payroll is an easy, and yet often overlooked, opportunity for companies to make operational changes that will have a direct, measurable impact on the bottom line. Electronic pay costs only 10 percent of the average cost of processing and distributing paper paychecks. The cost savings of having all employees use electronic pay is significant and provides added productivity as well as increased employee satisfaction. Electronic payroll also helps companies mitigate fraudulent activity that can occur when using paper paychecks. Despite the many benefits of electronic payroll delivery many franchisees approach to payroll has changed little over the years.
Employers will immediately eliminate the reoccurring costs associated with buying traditional paper paycheck stock with security features. Employers will also enjoy cost savings from decreased toner cartridge usage for their paycheck printers as well as significant decreases in wasted management time delivering paychecks or postage and overnight delivery charges for sending paychecks to employees at multiple work sites.
Other advantages of paycard deployment and use for employers include:
In a perfect payroll world, all employees within an organization would have their own bank accounts, and would elect to receive their pay via direct deposit. However, the reality is that not every employee has a bank account or can easily open one for a variety of reasons. If you are a franchisee in the hospitality, restaurant, retail, or transportation sectors of our economy, a greater portion of your workforce is likely to be part of the FDIC's estimated 17 million Unbanked Americans.
Source: 2011 FDIC National Survey of Unbanked and Underbanked Households
In the past, these unbanked employees presented a problem for employers that wanted to take advantage of the cost savings that can be achieved by increasing their use of the Automated Clearing House (ACH) system to initiate direct deposit transactions for their payroll disbursements. With the increased availability of paycards, employers now have a viable payment option they can use to electronically pay their unbanked workforce and achieve cost savings similar to those already realized with the use of direct deposit. In fact, both employers and their workers can share in the advantages that paycards offer.
From an employee's perspective, there are also intrinsic advantages and benefits when using a paycard offered to them by their employer instead of being paid each and every pay period via a traditional paper paycheck. With a paycard:
Since paycards were introduced thousands of companies have signed on to offer them to their employees. A paycard is simply a reloadable prepaid card that provides your company and employees with a convenient, low-cost or no-cost alternative to payroll checks. By eliminating cumbersome, paper-based payroll operations, companies automatically load employee pay directly onto paycards every payday. This can prove to be an efficient and flexible solution for employees without bank accounts, or those who prefer not to use their accounts for direct deposit. Better yet, everyone is eligible because no bank account or credit check is required.
Many unbanked employees often cash paychecks at check-cashing services where they are required to pay a fee and carry their entire paycheck in cash with them. Employees will appreciate faster access to funds, increased control over their finances, the convenience of worldwide acceptance and security enhancements that keep their funds safe.
Companies that utilize a paycard program reap the benefits of streamlined payroll processing, reduced administrative costs, increased management productivity, increased employee productivity and enhanced employee loyalty derived from providing employees a safe and convenient alternative to paper checks.
Paycards reduce payroll costs, increase efficiency and build employee loyalty all at the same time. That's how you re-invent payday and create paydays where everyone is a winner!
Matt Merriam is prepaid product specialist for WEX Inc. rapid! PayCard. He can be reached at 678-381-1733 or email@example.com.
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