Turning Over a New Leaf: Green Initiatives in Payroll

Green initiatives – are they compatible with payroll needs? Unless you’ve been off the planet Earth for the last few years, you know that Americans, in their homes and at work, have heard the call to reduce, reuse, and recycle.

In all aspects of our lives, we’ve heard the words “Go Green” somewhere. Have you wondered how you can apply that at work?  Payroll has opportunities to “go green” in many ways.  We’ll be taking a look at a few of them. How do you turn a payroll team green?  As it turns out, some things are easier than you may think.

• First of all, are you still printing /receiving paper checks? Or are you significantly reducing paper by supplying online paystubs for direct deposit or paycard payments? You can do this by having your employees enroll in online statements that they can save on their own computers or smartphones. Many payroll vendors offer this capability; this allows paper savings by not printing paystubs. For a company of 200 employees that pays weekly, a 50% enrollment in paperless-pay saves at least 10 reams of paper per year. Cost savings anywhere is a plus to the bottom line somewhere. For example, many payroll services charge by the check printed. No checks or advices printed = cost savings for payroll processing. Check your state rules to see if opting into paperless is allowed.
• What’s your direct deposit participation?  Is it 100%?  If not, try to get it there.  How to do that?  Remind employees that they don’t have to be in the office on payday if they have direct deposit and online access to their pay information.
  • What if there’s a blizzard (?)  In that case, employees might feel safer staying at home, but many would come to work on payday to ensure that they received their paychecks.  Direct deposit eliminates that type of dilemma.
  • We’ve all seen enough instances of catastrophic weather and other disasters that preclude employees from going into the office.  Paperless payroll allows your teams to stay home, and stay safe.

• Do you offer paycards for the employees who don’t want direct deposit, or who don’t have a bank account?  This is another green solution that helps eliminate paper paychecks.  Paycards offer convenience similar to direct deposit.  Instead of transmitting ACH transactions to bank accounts, you transmit them via ACH to the cards.  There are numerous resources for learning more about this option if you’d like to find out more.  Here’s a link paycard.americanpayroll.org.
• Here’s another thought:  people cashing paychecks are more likely to hop in the car at lunchtime to get to the bank to cash a paper check.  If you have off-hours access to your money via an ATM, you don’t need to use that extra gas to travel to that bank branch during business hours.  Cutting down on fossil fuels cuts down on carbon emissions and saves money.

Payroll processing and administration lend themselves to “green” paths pretty well.  For example, how do you process your payroll?  Let’s do a comparison.

Timecards machine punched (Old Way) vs. Biometric or Smartphone time entry (Better Way)

The old way of gathering time on timecards punched by clock has been succeeded many times over by better, less manually driven ways.  For example, a finger swipe or retina scan can establish an employee’s attendance electronically.  Then, that scan can be read by a Time and Attendance system or software program.  Call it Green Time.

Timecard total hours calculated manually (Old Way)  vs. Direct Interface to Payroll system (Better Way)

It takes time for a person to calculate “in” and “out” timeless lunch, etc. manually.  That person must also know all the rules for breaks and lunches, etc.  This is a process that is prone to errors.  Using an automated time and attendance system means that all the information in an employee’s hours profile is automatically taken into account when calculating his time entries.  Less manual calculation equals less time to calculate payroll and fewer errors, which also leads to more Green Time.

Payroll Data entered and transmitted to vendor on paper (Old Way) vs. Online Transmittal of Payroll Data to Vendor (Better Way)

Transferring data to your payroll vendor via paper input sheets is so 1970’s! So stop using that method and find a software program or a vendor that provides online access to direct data entry.  Save time, money and fuel (those paper timesheets and data entry forms have to be transported somehow) by making online entries.

Paper Output (Old Way) vs. Downloadable PDF reports (Better Way)

How does your system or vendor produce management reports for you?  If they are only available on paper, look for a better way.  In addition to the cost of delivering that paper, you also need to consider storage.  Payroll data needs secure storage and a clear retention schedule.  It’s so much easier to maintain online reports in a secure directory in the cloud than to find file cabinets, storage rooms or more expensively, offsite storage in a warehouse.  It’s also safer – if your reports are not on paper, there’s no way for it to be accidentally destroyed by water, fire, neglect, etc.

Another option is removable hard drives, secure from casual observation.  A single drive can contain thousands to hundreds of thousands of pages of reports, while a few thousand pages will fill up a small file cabinet.  Add in the Green Time you’ll save by searching on a hard drive or online vs. slogging through paper – it’s a no-brainer!

Accessing Paper Reports (Old Way) vs. Accessing Online Reports (Better Way)

Any paper payroll registers, custom reports or other needed information can only be accessed on paper.  That means you’ll need to be in the same place as the paper.  An online, or cloud-based directory, however, can be accessed remotely.  This means that in case of an emergency or a snowstorm, work can still go on even if you’re not physically in the office.

Paper Delivery (Old Way) vs. Electronic Delivery (Better Way)

Want to save money?  Look at the delivery charges you incur on your payroll deliveries.  The larger the packages, the more you pay.  The less paper that has to be delivered, the lower the delivery costs.  Cutting down on paper equals more Green Time. Take a look at all your current payroll processes.  Where is the Green Time hiding? Now that we’ve tackled paychecks, pay stubs, and the nitty-gritty of payroll processing, it’s time to review what changes we can make on IRS, state and local reporting to enhance our green initiative ideas. Are you aware that you can supply W-2’s to your employees electronically?  Think of how much time and how many headaches you can save:

• No more lost W-2’s requiring immediate replacement (“I’m at my accountant’s right now”)
• Lowered mailing costs for fewer paper W-2 forms mailed.
• Fewer delays in getting this important information to your employees
• No problems with addresses
• Fewer issues with postal delays
• Reduced use of paper, saving trees
• Costs of printing are reduced if you are printing fewer forms, check, stubs, returns
• Payroll team saves time because they don’t need to send out hundreds of duplicate W-2’s replacing lost forms

You do need to have the employees’ approval, by having them opt into the electronic delivery.  A communications campaign reminding the employees how easy it is to access their paystubs and W-2 Forms online will help you achieve a high percentage of participation. The Internal Revenue Service and Social Security Administration have been in front of U.S. government transition to electronic transmittals and payments.  Payments and refunds are all being made and accepted predominantly via ACH (direct deposit) and many payments are being made by paycard!

As employers, you already know that your 941 (Quarterly Federal Tax Return) and 940 (Annual Federal Unemployment Return) filings are electronic – no mailing, delays or missed deadlines from postal or mailroom delays.  The annual W-2 filing to the Social Security Administration has been electronic for a few years now. Many states and municipalities now require or allow electronic filing for their quarterly tax submissions.

Unemployment insurance returns have also become more streamlined; many states no longer require a quarterly wage detail report.  Best of all, most permit – and encourage – electronic payments.  No more lost checks, penalties, interest, time spent tracking a check that literally could be anywhere…. You and your company can be good corporate citizens, help the environment, save trees, conserve fuel and save money, just by implementing one or all of these initiatives. The result? Green Time!