The Move to Paperless Payroll

Paperless payroll is a growing trend in the payroll industry and offers many benefits for accounting firms and other businesses. The reasons for this transition are many and include records storage, improved accessibility and environmental friendliness. There are many facets of paperless payroll, including applicant tracking, employee self-service, direct deposit, payroll cards and online payroll reports. Let's review each one by one.

How Employee Self-Service Works

Employee self-service encompasses many features, including:
- allowing the employee to update demographic information
- access prior check stubs/deposit advices and W-2s
- and enroll for benefits online.

Not only does ESS provide the employees with greater ease and flexibility in updating and tracking personal information, but it also reduces the amount of time required by the HR/payroll administrator, aids in record storage and organization, and cuts back the quantity of paper used.

How employers and employees benefit from Direct Deposit

Historically, the primary benefit of direct deposit has been two-fold: it eliminates the time and effort required by the employee to deposit or cash his/her paycheck, and it eliminates the time and cost incurred by the employer when replacing lost or stolen paychecks.

But when direct deposit is coupled with an ESS solution, the employer no longer has to print deposit advices, thereby reducing time, money, and paper.

How to deal with "unbanked employees"

One of the newest trends in the payroll industry is the payroll card. Often requiring no credit check, the payroll card offers a direct deposit solution to the unbanked employee, a group that, according to Visa®, accounts for 12 to 15 million households.

The American Payroll Association estimates that 4 million payroll checks are lost and stolen each year, costing employers $48 million dollars annually in replacement check cost fees (according to a study by Celent Communications and Visa USA). These statistics exemplify the cost benefit that employers realize when they implement a payroll card program. Employees also experience cost and time savings with the elimination of the need for check-cashing services.

Online Reports Make Life Easier

Instead of collecting file after file of payroll reports payroll administrators often have access to online reports when they use an outsource payroll provider. Depending on the payroll provider, the client can usually access online reports within two hours of processing payroll; rather than having to wait until payroll checks are delivered a day or two later. Additionally, the reports can often be downloaded in an ASCII or Microsoft Excel format for sorting and trending and can be burned to a CD for backup storage. Online reporting also substantially reduces paper and storage space.