Save time with electronic payments

Improving business efficiency with electronic payments such as direct deposit, direct payment, and check conversion could improve the satisfaction of your employees and students, as well as save time, money, and the environment.

Whether you're converting checks that come from your students, paying your employees by direct deposit, or making and accepting your own payments through direct payment, you can keep your cash flow under control and gain access to funds more quickly. The expenses due to lost or stolen paychecks or nonsufficient funds fees on bounced checks can quickly add up, but electronic payments virtually eliminate most of those fees.

Going green with your green means helping to save our natural resources. Every year, paper checks use more than 674 million gallons of fuel and add 3.6 million tons of CO2 to the environment. If 20 percent of all households (about 22.9 million) were to switch to electronic bills, statements, and payments, every year the collective impact would:

• Save 151 million pounds of paper
• Save 1.8 million trees
• Avoid creating 1.44 billion gallons of wastewater
• Avoid creating enough wastewater to fill 2,180 Olympic-size swimming pools

According to PayItGreen, a coalition led by The Electronic Payments Association (NACHA), small businesses pay an average of 96 vendors by check each month. Factoring in the cost of paper checks, printer ink, envelopes, postage, and workforce, the average cost of cutting a check can be up to $2 for businesses versus 35 cents or less for direct deposit. If you employ 25 people, for example, you would save at least $2,000 a year just by paying them through direct deposit.

Although a recent survey of small business owners showed that only about a third use direct deposit (the electronic transfer of a payment from a business of any size directly into an individual's checking or savings account), the process can be quite beneficial. What can direct deposit do for you?

• Simplifies employee and contractor pay, travel reimbursements, and benefits.
• Small schools can’t always offer some of the competitive benefits of larger ones, such as multiple healthcare options, but you can offer your employees direct deposit.
• Employees won’t feel the rush to go to the bank during business hours to deposit their pay checks since they can access their money at the opening of business on payday.
• Electronic payments reduce administrative and processing costs, and add to your school’s productivity by freeing up your staff from processing checks; savings to your school can be anywhere from $2 to $3 per payment.
• Your bank statement will have a single dollar amount for the total amount of the direct deposit transactions, versus individual check amounts to reconcile.
• Financial institutions, payroll processors, and payroll software, such as Quickbook's Intuit or ADP, can enable you to provide direct deposit with very little setup.
• Provides an added layer of financial protection as it prevents criminals from altering or counterfeiting payroll checks. Financial institutions and governments use direct deposit to transfer millions of dollars every day.
• Calculate how much you can reduce the environmental impact of your business by switching your employees to direct deposit from paper paychecks by going to Pay it Green’s website.

Direct payment (where an employee or student electronically transfers payment to your school’s account) can also bring benefits and ease workload. Direct payment goes by many names, including automatic bill payment, automatic debit, electronic bill payment, or direct debit, although they are the same application.

• Electronic payments typically clear your account in about two business days.
• Direct payment is ideal for recurring payments, including flying club membership dues and maintaining block rate account balances.
• Many of your recurring payments, from rent and utility bills to flight equipment, fuel and other services can be paid through Direct payment.
• Research shows that direct payment can save companies an average of 11.5 cents per payment (versus checks) in reduced processing costs.
• Set-up is quick and easy; most financial institutions offer free bill-pay services that can be accessed 24/7 online.

Check conversion (also known as accounts receivable entry (ARC), point of purchase (POP), back office conversion (BOC), electronic check, e-check, electronic check processing, and check to ACH conversion) is the process of converting your student’s paper check payments into electronic payments.

• Prevents fewer errors and bounced checks.
• Reduces time and resources in payment processing.
• Requires very little effort or time to set up, and once it is established.

Although it does take a few minutes to set up electronic payments, doing so could save you hours in the long term.