Local Government and School Accountability
Module 2: Timing of Disbursements
Use Direct Deposit and Electronic Funds Transfer (EFT)
Offering direct deposit to your employees for payroll and paying certain bills by EFT can help reduce your disbursement costs and limit exposure to check fraud.
Direct deposit of payrolls can reduce costs of check processing, including canceled check storage, account reconciliation service costs and staff time used to reconcile the payroll bank account, reduce lost or stolen checks, and provide convenient arrangements and access for absent employees or employees working shifts at other than regular business hours.
As with direct deposit of payrolls, paying bills by EFT whenever possible can reduce costs of check processing and account reconciliation services, the occurrence of lost or stolen checks and postage expense.
Since few local governments conduct business without issuing at least some paper checks, it is important to have in place methods for deterring check fraud.
Next: Electronic Funds Transfer (EFT) and Automated Clearing House (ACH)