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