- 1). Inform employees at your company, either via staff meetings or formal memos, that you are offering a direct deposit option or making direct deposit mandatory. Explain verbally and in writing how direct deposit works and what the benefits are, such as avoiding the hassle of cashing or depositing a paycheck.
- 2). Provide each employee with a direct deposit authorization form. Hand out the forms at meetings or make the forms available for download on the employee section of your company's website. Include instructions for how to complete the form. Regardless of the format you use, the form should gather the employee's name and contact information, the name of the bank into which your payroll company will direct deposit funds, and the routing and account numbers for the bank and specific account. It should state your company's name and contact information, as well.
- 3). Ask each employee to fill out an authorization form, attach a voided check to it for verification of bank account and routing numbers, and return both to a supervisor or your company's payroll department. Provide a strict deadline by which employees must submit their forms. Enforce penalties such as withholding of paychecks or a writeup for employees who do not turn in the form, if your company wants to make direct deposit mandatory.
- 4). Ask your payroll department personnel to make copies of the forms and send the form data to your payroll processing company. Have the payroll company send a test direct deposit to the employee accounts to verify the accuracy of data and viability of the direct deposit system. Once the company verifies the direct deposit works, you should be able to send the payroll company information about the amounts to deduct and when as needed. The payroll company will send ACH files to the banks involved in the direct deposits so the banks know when and for whom they are authorized to complete the transactions and what the transaction amounts are.
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