Amount of company time employees spend cashing checks |
15 minutes per paycheck Assumption |
Assumption |
Costs calculated for hourly employees only |
Number of checks reissued |
0.10% |
Assumption |
|
Number of check exceptions per year |
7 |
Assumption |
|
Average staff time spent researching and clearing a lost/missing check |
30 minutes per inquiry |
Assumption |
Includes both payee and payroll staff time |
Time spent distributing checks |
1 minute per paycheck |
Assumption |
|
Time spent reconciling bank account |
4 hours per month |
Assumption |
|
Time spent on escheat processing |
8 hours per year |
Assumption |
Escheat processing is the requirement to send the proceeds of all uncashed payroll checks to a specified government entity on a periodic basis. The calculator assumes normal processing takes 8 hours in staff time per year. |
Time spent mailing checks/statements |
2 hours per payroll |
Assumption |
|
Mailing costs |
$0.44 per check |
Cost of first-class postage |
|
Cost of check stock |
$0.10 |
Typical computer check stock cost |
|
Cost of payment advice stock |
$0.10 |
Same as check stock cost |
Same cost as check if physically distributed or mailed (typically a voided check) |
Cost of envelopes |
$0.06 |
Cost of envelopes from a major stationery supply company |
|
Percentage of annual payroll fraud and duplicate check losses |
0.10% |
Assumption |
Assumed at 0.1% of total check payrolls |
Time spent printing, separating or signing checks per payroll |
4 hours per payrol |
Assumption |
|
Average check float1 |
2.75 days |
Assumption of days to clear a payroll check |
Assumes Friday payroll with half cashed immediately and the remainder cashed on Monday and Tuesday, with half overall cashed/deposited at corporate bank |
Average cost of funds |
3.25% |
Uses Wall Street Journal prime rate as of 1/10/2010 |
|