Direct Deposit for Contractors and Freelancers: Is It Worth It?

Updated: June 10, 2009

For freelancers or contractors, the bank still beckons to deposit checks, and it often takes at least a day to clear. Do you remember what that hassle was like? But some companies are using direct deposit for independent contractors to make payroll easier - both for the people doing the books and for the individuals doing the work.

Social Media Strategist Aliza Sherman Risdahl of Conversify! says that her company made the switch to direct deposit for their team of social media consultant contractors using Key Bank's direct deposit vendor payment plan. It costs the company about $10 a month, but she says that is made up for in time saved. "While the cost would be less to mail paper checks in terms of postage, the time savings is well worth it," says Risdahl. "Our bookkeeper sets up payments and triggers them at the end of each month upon receiving invoices."

The switch made sense for Risdahl's company and for the people working for it as independent contractors.

"As a virtual company, we've set out to do business startup differently. We want to leverage all the electronic services and solutions out there to be flexible, cost-effective and time-efficient. By using direct deposit, we are leveraging a service already available through our new corporate bank (we recently changed corporate banks to get better customer service and service offerings). Anything we can incorporate to increase efficiencies, save money, and keep overhead down is just smart business in this day and age," says Risdahl.

Featured Research
  • How to Select Contact Center Software in 9 Steps

    Your choice of contact center software will affect the future success of your business. Don’t leave this important decision to chance. This guide provides nine actionable steps for the selection process. more

  • [Infographic] 15 Questions to Ask When Selecting a VoIP Provider

    Deciding which phone system is right for your business can be difficult. With our VoIP technology blueprint, discover the top 15 questions you should ask VoIP vendors before you make a buying decision. more

  • 2017 Business VoIP Buyer's Guide

    In 2017, more business will transition to a VoIP phone system. If you are among them—or if you’ll be upgrading an existing VoIP system—you need to learn about the latest technologies and market trends. more

  • The Basics of Real Time Personalization

    Real-time personalization of the customer experience has been described as the holy grail of digital marketing. And the race is on. Gartner believes that by 2018, businesses that excel in personalization will outsell those that don’t by 20%. Though the benefits are clear, the path to get there is not. more

  • Hidden Costs of Contact Center Software

    Creating a great customer experience for each person who reaches out to your customer support center is vital to developing a loyal and ravenous customer base for your business. In fact, according to Walker Information, Inc., “By 2020, customer experience will overtake price and as the key brand differentiator.” more